Bankability Assessment of Lithium-ion and Vanadium Redox Flow Batteries in Kenyan Hybrid Renewable Energy Systems

Reliable and affordable electricity remains essential for rural development; however, in Sub-Saharan Africa (SSA), particularly Kenya, the major barrier to scalable rural electrification is increasingly the bankability gap, where technically feasible Hybrid Renewable Energy Systems (HRES) fail to attract sustainable investment. This study evaluates how battery storage technology selection influences investment viability by comparing lithium-ion (Li-ion) and vanadium redox flow battery (VRFB) systems in a rural Kenyan HRES. An integrated framework combining Homer Pro optimization, project-level financial modelling, Life Cycle Assessment (LCA), and AHP-based Multi-Criteria Decision Analysis (MCDA) was applied to assess techno-economic performance, environmental sustainability, and investor attractiveness. Results show that Li-ion systems achieve stronger short-term financial bankability, with lower Levelized Cost of Storage (LCOS) of KSh 23.17/kWh compared to KSh 28.32/kWh for VRFB systems, alongside higher baseline Investor Attractiveness Index (IAI). However, Li-ion technologies exhibit higher lifecycle environmental burden and replacement risk. In contrast, VRFB systems demonstrate lower emissions, longer operational lifetime, and stronger suitability under concessional and sustainability-oriented financing structures. Sensitivity analysis reveals that battery bankability depends not only on technical performance but also on financing structure, discount rate, and investor class.