Kenya receives Sh11bn boost for transition to clean energy

Davis Chirchir

Energy Cabinet Secretary Davis Chirchir turning on a valve at Geothermal Development Company (GDC) Paka Hills drilling site in Tiaty, Baringo County on August 4, 2023.

Photo credit: Francis Mureithi | Nation Media Group

What you need to know:

  • Kenya is a front runner in the transition towards 100 per cent clean energy by 2030 while ensuring universal access to electricity is achieved at the earliest.
  • The World Bank is supporting the government of Kenya in developing a smart and flexible energy system that makes these ambitions possible.

A $70 million (Sh11.2 billion) plan to boost Kenya’s clean energy strategy has been endorsed. The initial allocation of $46.39 million (Sh7.4 billion) by the Trust Fund Committee of the Climate Investment Funds (CIF) is aimed at advancing the integration and utilisation of renewable energy in the Kenyan grid, enabling the country’s transition to 100 per cent clean energy by 2030.

This approval, as part of the Washington-based organisation’s Renewable Energy Integration (REI) investment programme, will support Kenya’s ambition to reduce greenhouse gas emissions by 32 per cent by 2030 and achieve Net Zero by 2050. Kenya’s CIF REI plan will support access to clean, adequate, affordable and reliable electricity in the country.

It is expected to mobilise at least an additional $243 million (Sh39 billion) from the public and private sectors through implementing partners—the African Development Bank and the World Bank Group. Currently, the share of renewable energy in Kenya is almost 90 per cent – including 45 per cent geothermal and 26 per cent hydropower.

But the system faces challenges. During evening hours, it struggles to meet peak demand, but later, at night, generation surpluses from geothermal and wind are sometimes not dispatched. Kenya’s REI investment plan will improve dispatch, grid stability and flexibility to address these issues.

It will facilitate future private sector investment in innovative storage technologies such as battery storage and pumped hydropower. The energy system will also be better prepared for a significant increase in electric mobility and cooking. The plan contributes to the expansion of variable renewable energy such as wind and solar, from 19 per cent to 30 per cent by 2030.

CIF has established the pioneering REI programme precisely to address the issues linked to the deployment of clean and intermittent power sources in developing economies.

REI can support a mix of supply/demand side flexibility measures— enabling technologies, enabling infrastructure, market design and system operations improvement, and electrification and demand management; while advancing social inclusion and leveraging private sector financing.

At least 10 countries have been selected to take part in this programme, with Brazil, Colombia, Costa Rica, Fiji, and Mali’s investment plans endorsed by the CIF Trust Fund Committee in 2023. Interim CEO - Climate Investment Funds Luis Tineo said: “CIF’s concessional funding will be instrumental in getting power to Kenyan consumers where and when they need it. Through the Renewable Energy Integration investment programme, three of our multilateral development bank partners are collaborating with us to build a powerful coalition to boost Kenya’s ambitions.”

“We’re very excited to support Kenya in its trailblazing effort to reach universal energy access while embracing low carbon technology, from renewable energy and geothermal development to e-mobility and clean cooking,” added Mr Tineo. Principal Secretary, State Department for Energy Alex Wachira said:

“The Government of Kenya expresses its gratitude for being among the countries participating in the Renewable Energy Integration Programme and acknowledges the valuable support extended by the Climate Investment Funds.

REI facilitates enhanced integration of renewable energy to reduce greenhouse gas emissions in pursuit of the country’s Nationally Determined Contributions goal,” said Mr Wachira.

He noted that the plan will assist Kenya in her ambition to achieve 100 per cent clean energy in the power system by 2030 and place it well on the trajectory of achieving Net Zero by 2050. 

This programme is expected to promote gender balance among the professionals and resource persons who undergo training, creating a gender-responsive and diverse pool of skilled manpower in the renewable energy sector.

“Implementation of this programme is of high importance, and we look forward to achieving every component,” added the PS. World Bank Country Director for Kenya Keith Hansen said: “Kenya is a front runner in the transition towards 100 per cent clean energy by 2030 while ensuring universal access to electricity is achieved at the earliest.

The World Bank is supporting the government of Kenya in developing a smart and flexible energy system that makes these ambitions possible.”

Anthony Nyong, director for Climate Change and Green Growth - African Development Bank said: “We are excited to welcome the endorsement of the REI Investment Plan for Kenya, a transformative step towards a sustainable energy future. This comprehensive plan represents a strategic blueprint for integrating renewable energy into the country’s energy landscape.”

International Finance Corporation (IFC) Regional Director for Eastern Africa Mary Peschka said: “Supporting the growth of clean and affordable energy is central to IFC’s work and vital to Kenya’s inclusive green growth. By leveraging private sector expertise and resources, we can increase access to innovative energy solutions like battery storage, mini-grids, clean cooking and e-mobility.”