• The funds will go towards advancing the integration and utilisation of renewable energy in the grid.
• Currently, the share of renewable energy in Kenya is almost 90 per cent – including 45 per cent geothermal and 26 percent hydropower, but the system faces challenges.
Multilateral lender–Climate Investment Funds (CIF) has supported Kenya’s ambitious plans to fully transition to renewable energy for the national grid, endorsing a $70 million (Sh11.2 billion) plan.
The Trust Fund Committee of CIF has approved an initial allocation of $46.39 million (Sh7.4 billion), to advance the integration and utilisation of renewable energy in the Kenyan grid, in a drive meant to support the country’s transition to 100 per cent clean energy by 2030.
This now sets Kenya on a path that could see it unlock nearly $300 million (Sh 48.2 billion) from the public and private sectors, including through the African Development Bank and the World Bank Group.
According to the Ministry of Energy, Kenya with support from the World Bank, African Development Bank and the International Finance Corporation has been developing the Climate Investment Funds Investment Plan Prospectus.
The prospectus aims to mobilise approximately $70 million to support various renewable energy projects in the country.
This approval, as part of CIF’s Renewable Energy Integration (REI) investment program, will support Kenya’s ambition to reduce greenhouse gas emissions by 32 percent by 2030 and achieve Net Zero by 2050.
Kenya’s CIF REI plan will support access to clean, adequate, affordable, and reliable electricity in the country.
It is expected to mobilise at least an additional $243 million (Sh39 billion )from the public and private sectors through implementing partners—AfDB and World Bank, CIF said.
“CIF’s concessional funding will be instrumental in getting power to Kenyan consumers where and when they need it,” CIF interim CEO, Luis Tineo, said in a statement.
Currently, the share of renewable energy in Kenya is almost 90 per cent – including 45 per cent geothermal and 26 percent hydropower, but the system faces challenges.
During evening hours, the country struggles to meet peak demand, but later, at night, generation surpluses from geothermal and wind are sometimes not dispatched.
Kenya’s renewable energy integration investment plan is expected to improve dispatch, grid stability, and flexibility to address these issues.
It will facilitate future private sector investment in innovative storage technologies, such as battery storage and pumped hydropower.
The energy system will also be better prepared for a significant increase in electric mobility and cooking.
The plan contributes to the expansion of variable renewable energy, such as wind and solar, from 19 per cent to 30 per cent by 2030.
“The plan will assist Kenya in her ambition to achieve 100 per cent clean energy in the power system by 2030 and place it well on the trajectory to achieving Net Zero by 2050,” Energy PS Alex Wachira said.
Director for climate change and green growth at AfDB, Anthony Nyong, termed the endorsement as “a step towards a sustainable energy future.”
World Bank Country Director for Kenya, Keith Hansen, noted that Kenya is a front runner in the transition towards 100 percent clean energy by 2030, while ensuring universal access to electricity is achieved at the earliest.
"The World Bank is supporting the government in developing a smart and flexible energy system that makes these ambitions possible,” Hansen said.
CIF is a multilateral climate fund that enables climate action in over 70 low and middle-income countries.
It deploys highly concessional finance to empower transformations in clean technology, energy access, climate resilience, nature-based solutions, and other areas.
The pioneering REI program is precisely to address issues linked to the deployment of clean and intermittent power sources in developing economies.
REI can support a mix of supply or demand side flexibility measures— enabling technologies, enabling infrastructure, market design and system operations improvement, and electrification and demand management; while advancing social inclusion and leveraging private sector financing.
Ten countries have been selected to take part in this program, with Brazil, Colombia, Costa Rica, Fiji and Mali’s investment plans endorsed by the CIF Trust Fund Committee in 2023.