British investors are eyeing multi-billion shilling investment opportunities in Kenya’s renewable energy sector comprising of steam, wind, biomass, and solar power projects.
A delegation of British investors visited Nairobi this week where some initiated talks with both the government and potential partners.
London-based Equinox Energy Capital, for example, is in talks with the Energy ministry to set up a biogas plant in Homa Bay which will use the invasive hyacinth weed from Lake Victoria as feedstock to generate electricity.
Eiser Infrastructure Partners, a London headquartered equity fund, is working on a partnership with Barclays Bank to link energy-focused local investors with global financiers.
Other British firms are weighing up investment options in geothermal drilling, setting up solar farms, and mobile geothermal plants technically known as wellheads, Energy Principal Secretary Joseph Njoroge said on Thursday.
“I invite UK investors to take interest in our various energy initiatives from generation, transmission, and distribution lines,” Mr Njoroge pitched to the delegation.
“We want to complement public funds in the energy sector with private investments. We will provide concessions,” he said.
Kenya is banking on its dollar-denominated feed-in-tariffs for renewable energy producers to woo British and other global investors to the sector.
Furthermore, energy regulations stipulate that Kenya Power, the sole electricity retailer, must sign 20-year power purchase agreements (PPA) with producers, offering comfort to private investors to recoup their investments.
Mr Njoroge also told the British investors that Kenya’s abundant geothermal and wind resources are yet to be fully harnessed, with opportunities in solar given the geographical position of East Africa’s biggest economy.
Kenya is racing to implement a deal to add 5,000 MW to the grid by the end of this year, and is turning to private capital to match State-owned generator KenGen in developing this capacity.
The impending UK investment flows are set to deepen the presence of British firms in Kenya’s energy scene including Tullow Oil which has struck commercial deposits of crude, Aldwych International (90 MW Rabai Power), Oxford-based Tropical Power’s 2.6 MW first grid-connected biogas plant in Naivasha, and Solarcentury which set up a carport solar plant at Garden City Mall.
The UK-Kenya Renewable Energy Conference signals a thawing of relations between Nairobi and London, earlier hurt by Britain’s tough stance to have only ‘essential contacts’ with President Uhuru Kenyatta who took office while facing trial at the International Criminal Court (ICC) for alleged crimes against humanity.
The UK’s export credit agency in May signed an export financing and insurance deal to support renewable energy projects in Kenya to the tune of £250 million (Sh32.2 billion.)
Credit: Business Daily