Kenya in talks with energy firm for Sh455m carbon credits deal
The carbon credits market is turning out to be a lucrative source of income as evidenced by the billions that electricity producer KenGen is set to earn from the trade next year.
Kenya is in talks with carbon markets consulting firm Suni Smart Energy to monetise the 15 billion trees that President William Ruto’s administration is seeking to plant in the next eight years.
The talks led by Ministry of Environment, Climate Change and Forestry are aimed at inking a $3.5 million (Sh455 million) 10-year deal that will also see Suni Smart Energy support the development of a trading platform for carbon credits across the 47 counties.
“The proposed project has two components, development and trade of carbon credits arising from the 15 billion tree planting programme,” the Public-Private Partnership (PPP) Directorate says in disclosures on the deal.
Dr Ruto last year launched the national campaign to have more trees planted countrywide by 2032, as part of reducing greenhouse emissions and reversing deforestation.
But the head of State has been silent on whether his administration would seek to monetise the billions of trees being planted by trading them in the carbon credits market.
The carbon credits market is turning out to be a lucrative source of income as evidenced by the billions that electricity producer KenGen is set to earn from the trade next year.
Kenya last year inaugurated the National Tree Planting Bay, designated as November 13 every year as the government races to ensure that billions of trees are planted by 2032.
The government has so far not disclosed how many trees have been planted under the ambitious project, which has also drawn leading corporates and lobbies in the private sector.
Feasibility study on the privately initiated project is expected to be completed by the end of the year, setting the stage for finalisation of the agreement.
Suni Smart Energy, which is headquartered in Nairobi, says it offers a range of solutions in the carbon market, including validation and trading of carbon credits and carbon asset management among others.
State-owned electricity producer KenGen recently disclosed that it will earn $32.05 million (Sh4.13 billion at current exchange rates) from the sale of its certified emissions reductions (CERs) from its six clean power development projects.
Carbon trading has been gaining traction globally as governments and the private sector globally seek to tap into the monetary aspect of the trees being planted to curb carbon emissions.
Besides designating a national day, Kenya enacted the Climate Change (Amendment) Act 2023 to regulate the carbon credit market.
Kenya is also set to create a National Carbon Registry that will document the verified carbon credits and emission reductions as the government seeks to keep track of the revenue stream.
Other countries like Chile, Vietnam, Costa Rica, Cote d’Ivoire, Democratic Republic of Congo, Dominican Republic, Fiji, Guatemala, Indonesia, Lao PDR, Mozambique and Nepal are already tapping into the vast rainforests to trade carbon credits.
The countries are in a joint venture under World Bank’s Forest Carbon Partnership Facility and are expected to fetch an estimated $2.5 billion (Sh322.6 billion) from the sale of the carbon credits.
