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Kenya has long been a continental leader in renewable energy use for electricity production, with the use of hydropower dating back a century. As a result of climate change impacts – such as higher temperatures, erratic rainfall patterns and droughts – water levels in various hydropower sites have been greatly reduced, leading to a major decline in electricity generation capacity. To meet this electricity deficit, Kenya uses thermal power production, a process that uses a significant amount of fossil fuels. These fossil fuels are both expensive to import – a cost which is passed on to the end user – and also contribute to greenhouse gas (GHG) emissions, which cause global warming.

To reduce its dependence on thermal power, the country has been making great strides in renewable energy generation from sources such as geothermal, solar and wind, in line with its national development blueprint, Vision 2030, which seeks to promote the development of renewable energy. To accelerate this process, Kenya’s President, Uhuru Kenyatta in 2018 made a commitment to generate 100% of electricity from renewable energy sources by 2020(link is external). As at 2019, 86.8% of the country’s energy mix came from renewable energy sources, with 45% coming from geothermal energy. The use of thermal power for electricity generation also declined to 11.9% in 2019. These achievements have contributed towards Kenya’s target of reducing greenhouse gas emissions by 30% below business as usual by 2030, as outlined in its Nationally Determined Contribution, which forms part of the international Paris Agreement on climate change.(link is external).

 

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To make such progress, the government of Kenya has been proactive in creating an enabling environment for private sector investments in the renewable energy sector. In January 2013, Kenya enacted the Public Private Partnership Act to regulate private sector investments, hence increasing investor confidence. The government also provided investment incentives such as the Feed in Tariff (FiT) policies, which allow independent power producers to sell electricity generated from renewable energy sources to the national off-taker at a pre-determined fixed rate over 20 years. These tariffs have so far been revised twice to address investor challenges, which is a demonstration of the government’s responsiveness to the needs of the private sector.

Development partners have also been instrumental in encouraging private sector investments in the country, through measures such as providing concessional financing and partial risk guarantees. During the development of the Turkana Wind Project (300 MW) and Phase 1 of the Menengai Geothermal Project (105 MW), the African Development Bank provided Partial Risk Guarantees to investors, to mitigate against the failure of government to meet its contractual obligations. The Bank, together with the Climate Investment Fund (CIF), also provided concessional financing to Voltalia, a private sector investor, during the development of the Kopere Solar Project (50 MW) at rates lower than those of commercial lenders.

Whereas significant progress has been made in renewable energy generation, access to affordable and reliable electricity, especially for the end user, still remains a challenge. Given high electricity charges and frequent power outages, a large number of Kenyans, especially low-income earners, still prefer to use alternative sources of energy such as biomass and micro solar solutions, as opposed to electricity from the national grid.

 

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The government of Kenya, through the Kenya Off Grid Solar Access Project (K-OSAP)(link is external) is providing mini grids, stand-alone solar systems, clean cookstoves and solar water pumps to increase clean electricity access for underserved communities. These solutions are expected to improve the quality of life for citizens through better health, industrialization and improved services such as schools and hospitals.

As development partners and the private sector continue to support the country’s energy sector, emphasis should continue to be placed on access to affordable, clean and reliable energy, especially for the lowest-income consumers, to enable sustainable development for all.

By

  • Dr Olufunso Somorin, Regional Principal Officer, Climate Change and Green Growth, East Africa, African Development Bank
  • Muthoni Nduhiu, Consultant, Climate Change and Green Growth, East Africa, African Development Bank

 

Source: African Development Bank, AfDB

 

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