A solar water heater at El Molo Bay Primary School in Marsabit. A World Bank funded project targets Kenyan green start-ups. PHOTO | FILE
Kenyan startups and entrepreneurs in the green technology space stand to benefit from a $20 million (Sh2.02 billion) fund launched in Nairobi last week. The Kenya Climate Innovation Centre (KCIC) launched the facility dubbed Kenya Climate Ventures targeting small and medium enterprises that operate in the renewable energy, agribusiness and water management sector.
The World Bank-sponsored fund will focus on investing capital (equity or long-term debt) in early stage clean ventures that have already tested the viability of their idea and need to move on to commercialisation.
“The climate ventures facility is mainly there to help the startups move to the next level and scale their business,” KCIC chief executive Edward Mungai said in an interview during the fund’s launch a week ago.
“Not only will we look for companies with a high return on investment but also pick out those with the greatest positive socio-economic and environmental impact.”
The new facility in an addition to the maximum amount of $50,000 (Sh5.05 million) that the centre gives startups with viable ideas in order for them to proof their business concept.
To qualify for funding, startups must have good management teams to implement their innovative business plans which market green technology products that have a sustainable competitive advantage.
While climate change poses a great threat to the livelihoods of Kenyans and the global goal of poverty eradication, there are several opportunities that remain unexploited partly due to access to financing, he said.
“Mitigation and adaptation to climate change provides numerous business opportunities to the private sector which by extension helps in the creation of job opportunities, especially for young people.”
In March, Kenya was ranked as one of the fastest growing markets for renewable energy by consultancy Ernst & Young (EY)’s Renewable Energy Country Attractiveness Index.
The country was placed in the Rising Star category, which highlights growth markets that are now showing no signs of slowing down in their efforts and are continuing to offer far-reaching energy investment opportunities.
With a limited number of Kenyans connected to the national electricity grid as well as a fraction accessing clean water, there remains a huge potential to establish businesses that can bridge the gap.
The KCIC, was launched in September 2012 as World Bank’s Infodev programme and is supported along with UKaid and Danida.
The centre, which is housed at the Strathmore Business School, has to date incubated more than 135 startups. “Some of these startups have been very successful while others have been a total disaster,” said Mr Mungai.
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