Society

How Kenya can fund green energy projects

gitagama

Nation Media Group CEO Stephen Gitagama speaking during the second day of sustainable energy conference at Geothermal Spar in Naivasha on June 17, 2022. PHOTO | CHEBOITE KIGEN | NMG

The sustainable energy conference held last week brought focus on the need for more funding to spur the generation of clean electricity to provide affordable power and protect the environment.

The forum, drew top government officials, national and international banks and private energy sector players whose key message was breaking the funding hurdles that hamper efforts to generate more renewable energy.

Funding remains one of the biggest challenges facing green energy projects in Kenya with the African Development Bank putting the financing gap in Africa at $23 billion (Sh2.69 trillion) a year.

But experts at the conference said that the country has enough funds to finance the projects, offering hopes for Kenya’s efforts to capitalise on its vast wind, solar and geothermal power sources.

“Liquidity in the market far exceeds the place where it can be put but we need more green projects that are climate-friendly. More Public-Private Partnerships provide more sustainable funding and the public and private a chance to do business together,” Kiprono Kittony, the chairman of the Nairobi Securities Exchange, said.

The International Finance Corporation (IFC) disclosed plans to seek more partnerships that target the transmission space in green energy.

“IFC is keen to strengthen funding for green energy projects through more partnerships with the private sector and government. We want to see more of refinancing assets to free up funds, especially for the transmission space,” Tianna de Mello, the senior operations officer, Infrastructure Upstream Africa at IFC said.

This comes amid increasing calls by banks for diversification in the source of funding for green energy projects in Africa.

Geothermal power accounts for 37.3 percent of the country’s electricity mix while the share of wind and solar is 16 and one percent, bringing to 54.3 percent the share of clean energy in the national grid.

But the country is keen to tap the largely idle potential in wind and solar energy, prompting the conference that is key to drawing policy paper that Kenya will bank on in the coming years.

“Yesterday, we were told of the $23 billion funding gap but today we have been told that we are awash with liquidity. Today hope has been found,” Nation Media Group CEO Stephen Gitagama said on Friday.

“We have been reminded that we can achieve sustainable and all-inclusive energy through collaboration between the government and private sector,” he said.

Increased use of renewable energy is part of the African Union’s goals to accelerate economic growth through increased use of clean energy sources.

An estimated 80 percent of the 1.5 billion in the world who lack access to electricity are in rural areas of sub-Saharan Africa, with chronic power shortages plaguing 30 African countries, according to AfDB.

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