Abyssinia invests in Sh323 million solar energy

The agreement between Empower New Energy and Abyssinia Group of Industries’ Awasi steel plant will deliver about 14 gigawatt hours (GWh) of clean electricity annually. [Courtesy]

Norway-based renewable energy investor Empower New Energy has deepened its presence in Kenya with a $2.5 million (Sh323 million) solar power contract at Abyssinia Group of Industries’ Awasi steel plant, bringing the site’s total installed solar capacity to 9MW.

The 25-year power supply agreement, signed in September 2025, will deliver about 14 gigawatt hours (GWh) of clean electricity annually.

The project is expected to cut Abyssinia’s power costs, reduce exposure to volatile grid tariffs and diesel prices, and eliminate more than 7,000 metric tonnes of carbon dioxide emissions each year.

The project offers stable long-term returns in a market where energy-intensive industries are seeking cheaper, predictable sources of electricity.

The company, which finances, builds, and owns solar plants for commercial clients in Africa, has positioned itself to tap on rising demand from manufacturers facing high electricity costs in Kenya. Kenya’s steel sector is particularly vulnerable to energy fluctuations, with power costs often making upto 40 per cent of production expenses.

Abyssinia, East Africa’s largest steelmaker with nearly one million metric tonnes in annual capacity, is betting that renewable energy will not only lower operating costs but also strengthen competitiveness in regional markets.

“Reliable and affordable energy is critical for steel production,” said Abyssinia CEO, Jateen Patel in a statement.

“By expanding our renewable portfolio, we are reducing costs, cutting carbon, and showing that heavy industry in Africa can lead the way toward a cleaner future.”

Industry analysts note that such private solar projects are beginning to reshape Kenya’s power sector, traditionally dominated by state utility; Kenya Power. For investors, long-term supply contracts like the one signed with Abyssinia offer predictable cash flows while helping Kenya move closer to its target of reducing greenhouse gas emissions by 32 per cent under the Paris Agreement.

The plant will be constructed and operated by Nairobi-based Spenomatic, which has a portfolio of over 160MWp of solar installations in the region.

With energy costs and climate targets driving demand, observers say the industrial solar market in Kenya could become one of the most attractive growth segments for private equity and impact investors over the next decade.