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Kenya to set up $2 billion energy fund

  • 12 years ago (2009-11-30)
  • David Flin
Africa 261 Europe 920 Renewables 702

The Kenyan government has announced that it will set up a $2 billion revolving fund to lend to those investing in green electricity generating projects. The Ministry of Finance said that the World Bank, the French Development Agency, KfW of Germany, and the African Development Bank had agreed to help the government set up the fund.

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The Finance Permanent Secretary Joseph Kinyua said that the money will be lent to the private sector to invest in commercially viable geothermal, solar and wind electricity generation projects. He said the aim is to scale up investment in renewable energy sources. It will also reduce reliance on drought-prone hydropower and expensive fossil fuels.

Kinyua said that the government is considering granting sovereign guarantees to independent power producers, and that Kenya is negotiating for clean development mechanism funds of the Kyoto Protocol in order to benefit from carbon trading through reduced emissions.

Energy Permanent Secretary Patrick Nyoike said that Kenya is committed to green power generation projects as “geothermal, biomass and wind-based power systems are much cheaper than fossil fuel plants. He said the country will implement green energy power generation projects with a total capacity of 2000MW by June 2012 through mobilising technical and financial resources to expedite construction and commissioning. Nyoike said the government will continue to undertake resource assessment and provide results to private investors. Wind resource assessment for 33 sites is in progress, and a survey of 14 hydro sites will start in January 2010.

At the same time, the Kenyan government is developing a plan that will see the country gain green economy status by 2020. Prime Minister Raila Odinga said that the government will allocate more resources and even borrow on commercial terms to develop geothermal fields. He said the government has received attractive proposals for a combined capacity of over 1000MW, but the high cost associated with developing wind, solar and biomass hinders the potential of such sources.