•Kenya is increasingly attracting a lot of interest in Green hydrogen joining a multitude of renewable energy technologies which are gradually finding their space in Kenya.
•Since 2021 the company says it has participated in de-risking approximately 13.4 billion dollars of investments and assets into and across Africa.
Business and political leaders must do more to de-risk investments for the country to stimulate capital deployment into the renewable energy sector.
This is according to Africa Specialty Risks, a (re)insurance company that provides comprehensive, risk mitigation solutions to local and global customers across the African continent.
ASR says there is a need for development financiers to remodel their operations to attract other resources to close the huge financing gap of some of the projects.
Africa Specialty Risks Chief Executive, Mikir Shah, says government policymakers should also play their part in de-risking projects.
However, because of the relatively new technologies involved, as well as the regulatory uncertainties that accompany the introduction of new energy sources, renewable energy projects are frequently regarded as risky investments.
“It is the only way we will encourage enough energy production. Across Africa, including Kenya, governments don’t have enough financial power to develop their own energy projects. It has to be done through Public-Private partnerships,” said Shah.
The financial services, and reinsurance sector, with their financial power, extensive networks, and ability to drive systemic change, have a unique opportunity to be the catalyst that accelerates the pace and scale of this critical transition into renewable energy.
This is coming at a time when Kenya is increasingly attracting a lot of interest in Green hydrogen joining a multitude of renewable energy technologies which are gradually finding their space in Kenya.
Kenya is among countries from the East and Central Africa region lined up to benefit from a $88.9 million (Sh12.4 billion) clean energy facility under Power Africa, a U.S. government-led initiative with private sector players to increase energy access and end energy poverty.
The new round of funding was announced by the United States International Aid Agency administrator Samantha Power will present increased opportunities for re-insurance firms in the energy sector.
“The perception of risk in Africa is substantial whether the risk is there or not. That’s why we provide insurance risk cover to allow people to invest knowing that they can call on the insurance cover,” added Shah.
Speaking to The Star on the sidelines of the 25th edition of the Africa Energy Forum, ASR’s Head of Energy Underwriting, Suzan Pardesi said tailoring financial solutions to meet the diverse needs of investors will attract a lot more investments.
She says that besides funding, financial institutions have an opportunity to provide valuable advisory services to investors seeking to navigate the renewable energy landscape.
“We train the local clients on their potential risks so that they can benchmark the risk against similar risks internationally. We can assist businesses in transitioning to renewable energy sources by providing expert advice on project finance and risk management,” said Pardesi.
Since 2021 the company says it has participated in de-risking approximately 13.4 billion dollars of investments and assets into and across Africa.