Central Bank governor Patrick Njoroge has challenged commercial banks to support green energy initiatives, as the country gears towards building a strong pool for financing renewable energy projects.
This is ahead of the planned ‘green’ bond set to be issued this year. The Kenya Bankers Association and the Nairobi Securities Exchange are planning to issue the country’s first green bond in the third quarter of 2017.
The proceeds will be used to finance projects in the renewable energy, energy-efficiency, green transport and wastewater treatment sectors.
Speaking during a workshop on Sustainable Use of Natural Resources and Energy Financing by Agence Française de Développement and the Kenya Association of Manufacturers, Njoroge asked banks to give affordable loans among other incentives to green compliant institutions.
“The ongoing success of AFD’s SUNREF programme should be an eye-opener for Kenyan banks to diversify into green energy financing because of the growth potential in the renewable energy and energy efficiency sectors,” Njoroge said.
KAM chief executive Phyllis Wakiaga said increased production and use of renewable energy will help cut the cost of production by manufacturers, who are still grappling with a high cost of energy.
KAM has been working closely with AFD’s SUNREF to improve the quality of renewable energy and energy efficiency technology in the country.
The two have built a project portfolio of over 250 projects in hydro, solar, biogas, biomass and energy efficiency and energy service companies, and financed 16 projects to the tune of $58 million(about Sh5.99 billion) since 2011.
“There are still many opportunities available to improve on the quality of renewable energy and energy efficiency technology which will ultimately reduce the cost of production and increase competitiveness,” Wakiaga said.
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