Abyssinia Invests KSh 323 Million in Solar Power for Steel Plant

Nairobi, Kenya — September 26, 2025 (EAT).

Norway-based green energy investor Empower New Energy has struck a KSh 323 million (USD 2.5 million) solar power contract with Abyssinia Group of Industries to power its Awasi steel plant, bringing the facility’s total installed solar capacity to 9 MWp. 

The Latest

• The 25-year power purchase agreement (PPA) will see the solar installation generate about 14 gigawatt-hours (GWh) of clean electricity annually for the plant. 

• The project is expected to eliminate more than 7,000 metric tonnes of carbon dioxide emissions each year. 

• The new 4 MWp component will be built by Spenomatic (a Nairobi-based engineering firm), complementing earlier installations totalling 5 MWp already supplying the plant. 

• Empower New Energy recently obtained an Electricity Generation License from EPRA for the solar plant. 

Context & Significance

• Abyssinia is one of East Africa’s largest steel producers, with operations across Kenya and neighboring countries. 

• Steel production is energy-intensive and vulnerable to volatile electricity and diesel prices. The move toward on-site solar power offers cost stability and risk mitigation. 

• The deal contributes to Kenya’s climate goals, particularly its commitment to reduce greenhouse gas emissions by 32% under the Paris Agreement. 

Risks, Implications & What to Watch

Opportunities / Benefits

• The solar power supply will reduce reliance on costly grid power and diesel generators, lowering operational expenditures.

• The long-term contract provides predictable pricing, which is attractive for industries needing stable energy costs.

• It positions Abyssinia as a leader in industrial decarbonization in Kenya, possibly creating competitive advantage in regional markets.

Risks / Challenges

• The success depends on reliable execution, maintenance, and integration into existing power systems.

• Delays in construction or regulatory approvals (e.g., grid interconnection) could slow benefits.

• The PPA must be honored over the long term, and macroeconomic or policy risk (tariff changes, taxation, regulation) could affect returns.

What to Watch

• Timelines for construction start, commissioning, and grid integration.

• Annual performance: whether the project meets the projected 14 GWh output.

• The impact on Aba­ssinia’s unit cost of power and competitiveness.

• Any public disclosures of the PPA terms (tariff rate, escalation clauses, penalties).

• Whether similar industrial solar investments follow in other sectors.