‘Triple Dividend’ no longer CSR; it is profit-centred
President Uhuru Kenyatta tours various exhibition stands during the Sixth Global Off-Grid Solar Forum and Exhibition at the Safari Park Hotel, Nairobi, on February 18, 2020.
What you need to know:
- Kenya needs to be a net exporter in processed and manufactured goods.
- By exporting locally manufactured goods, we’re exporting our energy.
Following an assessment of Hurricane Ida, US President Joe Biden said on September 7 : “I think we’re at one of those inflection points where we either act or we’re going to be in real, real trouble; our kids are going to be in real trouble.”
An inflection point is an event that results in a significant change in the progress of a company, industry, sector, economy or geopolitical situation, a turning point after which a dramatic change, with either positive or negative results, is expected.
The 26th Conference of the Parties (COP26) to the United Nations Framework Convention on Climate Change (UNFCCC), of which Kenya is a signatory, is due in Glasgow on October 31-November 12. Ahead of what could be a pivotal climate change meet, there is an urgent need for Kenya to report on progress on Climate Change Action.
On this, the Kenyatta administration can be commended for, not least, zero-rating Solar PV VAT tax, bolstering our African rating as an off-grid solar PV penetration leader, more so in last-mile connectivity.
The Biden government has a strategy of building a zero-carbon power sector by 2035, backed by $2 trillion (Sh200 trillion) public funding. It is banking on the ‘Triple Dividend’ , which would supercharge the wind, solar and energy storage with construction of new plants while underwriting billions of dollars of investment in clean energy supply chains.
Bottomline benefits include reduced losses, positive economic benefits in the economic risk matrix, increased productivity, a driver of innovation, of which America is a world leader, and, most importantly, social and environmental benefits.
In the “Adapt now: A global call for leadership on climate resilience” report, the commission, led by a remarkable group, including Microsoft founder Bill Gates, former UN Secretary-General Ban Ki-moon and World Bank CEO Kristalina Georgieve, said that “investing $1.8 trillion (Sh180 trillion) in climate solutions by 2030 will yield $7.1 trillion in net benefits.” A four-fold return on investment.
Forgone income
A large steel and cement investor recently revealed how Kenya Power’s Sh2.8 billion quotation to connect electricity to one of his clinker factories caused a brainwave on him to consider self-generation using climate-resilient solar PV technology. The billionaire is able to generate 28 MW of power at 3.5 times cheaper than grid power while the utility frets over a Sh200 million forgone income.
I’ve argued before that Kenya’s 2031 industrialisation goal is hinged on our energy policies. A key policy that is muddled in obscurity, more by design than default, is the feed-in tariff (FiT). Mini-grid industry players with EPCF (engineer, procure, construct and finance) arrangements are frustrated in their efforts to acquire a FiT deal with the utility. Efforts to get clear-cut information is cluttered in bureaucracy, despite the Freedom of Information Act.
Kenya needs to be a net exporter in processed and manufactured goods. Energy is a component of the final product. By exporting locally manufactured goods, we’re exporting our energy. We need an inflection point: We can’t export expensive energy.
Ms Hassan is the corporate and partnership manager, Solarnow Kenya. [email protected]
