Investors from industrialised countries are racing to strike financing deals with Kenya in partnerships set to open new avenues for donor support as the world switches to green economy.
Prime Minister Raila Odinga says several investment bankers and overseas investors are currently engaged in negotiations with the government on how the country’s invigorated tree planting campaign can benefit from the international carbon credit market.
“These are investors who see real and considerable opportunities in our forestry development programmes,” Mr Odinga said at a consultative forum on Mau Rehabilitation held in Nairobi on Wednesday.
The UN is working on a legal framework called Reducing Emissions from Deforestation and Forest Degradation (REDD) under which the industrial countries will fund forest development projects in the developing world in order to offset the amount of green gases that their factories emit.
The finer details of the UN’s environment financing facility will be unveiled later this month when delegates from all over the world meet in Norway to conclude the partnership agreement.
In Kenya, investment bankers are seeing a financing opportunity in the current joint campaign between the private sector and the Government which aims to increase the country’s forest cover from the current 1.7 per cent to 10 per cent by 2030.
“Investors from the developed world have settled on Kenya as the most aggressive African country as far as preparedness to tap from the multi-billion international carbon credit opportunities are concerned,” Achim Steiner, the United Nations Environment Programme’s Executive Director said.
Experts reckon that the country’s five water towers stand as a front-runners in the rush to tap from the multi billion dollars that developed countries have pledged to investment in green projects of the developing countries.
Dr Hellen Gichohi, president of the African Wildlife Foundation, said the Mau Forest rehabilitation project alone has a potential of earning the country billions of shillings.
“Our preliminary calculation estimates that Mau Forest has a potential of 15 million tonnes of carbon per year,” she said.
Going by an average international rate of Sh1,600 per tonne of carbon, Kenya will earn Sh24bn per year in extra funding if it rehabilitates the Mau Complex.
Going by last year’s budgetary allocation, this level of funding can be used to run the ministry of health for one year.
Mr Hassan Noor Hassan, the chairman of the Mau rehabilitation programme says a total of Sh7.6 billion ($99.5 million) will be spent in the four-year Mau rehabilitation programme.
The was established by Nation Media Group, East African Breweries and Equity Bank in conjunction with State agencies such as the Kenya Wildlife and Forestry Services.
“Initially, most international donors adopted a wait-and-see attitude but this is likely to change this year as the country – both political and private sector - has now shown unprecedented commitment to the rehabilitation of water towers,” said Mr Steiner.
At the Copenhagen climate meeting, rich countries committed themselves to financing the impact of climate change in developing world at the cost of $30 billion.