In this edition of the Scaling-up renewable energy in Africa series of publications, we focus on the climate change investment policies and opportunities in Kenya in the energy sector. This briefing is a high-level compilation of key policies and projects, based on publicly available sources, and is not intended to be comprehensive.
Key points on Kenya
- Kenya has a population of more than 42,104,000.
- Per capita emissions are very low, at about 0.3t/CO2 per year.
- Kenya is one the most industrially developed countries in East Africa, yet the manufacturing sector accounts for only 14 per cent of GDP. Agriculture (including coffee and tea cultivation) is the main source of revenue for 70 per cent of the population.
- Kenya has introduced feed-in tariffs to promote renewable energy generation.
- Priorities for renewable energy deployment in Kenya include wind, small hydro, biomass, and geothermal.
- Under the Scaling-up Renewable Energy Program, Kenya’s draft Investment Plan seeks funding for the development of 400 MW of geothermal power, the implementation of Hybrid Mini-Grid Systems and of Solar Water Heating.
Kenyan CDM Projects
There are currently 8 CDM projects registered in Kenya in the cogeneration, geothermal, wind, land use and hydro sectors. As Kenya is not a Least Developed Country, CERs issued from CDM projects registered after 31 December 2012 will not be eligible for compliance under the EU’s Emissions Trading Scheme.
Kenya Vision 2030
The development pathway set out in Kenya’s Vision 20301 aims to drive the country into a globally competitive and prosperous economy with high quality of life. The first Medium-Term Plan (MTP – 2008 to 2012) was prepared to implement the first phase of the strategy. It calls for rehabilitating the road network, upgrading the railways, improving urban public transport, and expanding access to electricity and safe water. Increasing access to affordable energy is a key element of Kenya’s plans.
National Climate Change Response Strategy
Kenya currently has no laws or policies that deal explicitly with climate change. The one policy that has attempted to address climate change to some extent is the draft National Environmental Policy of 2008. Kenya’s Environmental Management and Coordination Act 1999 has only a few provisions relevant to the mitigation of climate change.
Kenya’s National Climate Change Response Strategy (NCCRS) seeks to respond to the challenges climate change is posing to Kenya’s socioeconomic development.2 The objectives of the NCCRS include:3
- assessing the evidence and impacts of climate change in Kenya
- recommending robust adaptation and mitigation measures needed to minimise risks associated with climate change while maximising opportunities
- enhancing understanding of climate change and its impacts nationally and in local regions
- framework needs, recommending research and technological needs and avenues for transferring existing technologies
- providing a conducive and enabling policy, legal and institutional framework to combat climate change
- providing concerted action, resource mobilisation and robust monitoring and evaluation plans.
The Strategy recommends that a comprehensive climate change policy and related legislation be put in place. It recommends that a new climate change legislation be enacted, a process that could run concurrently with formulation of a climate change policy rather than reviewing and updating the clauses on climate change in the draft National Environmental Policy.4
In addition, the Strategy recommends that, as institutions currently in place to govern climate change affairs are inadequate, a dedicated and adequately funded Climate Change Secretariat be established within the Ministry of Environment and Mineral Resources to oversee climate change issues.5
Feed-in Tariff (FiT) Policy
FiTs were introduced in Kenya in 2008 and were revised in 2010 to accommodate additional renewable energy sources and reviewed the tariffs. The FiT Policy has elicited a total of 49 expressions of interest from potential investors to develop renewable energy sources. These included wind, biomass, hydro, geothermal, biogas and cogeneration projects. FiT levels have been set at 12 US cents per kWh for wind, 8 US Cents per KWh for biomass and 8.5 US Cents per KWh for geothermal.6
Scaling-up Renewable Energy Program
The Scaling-up Renewable Energy Program (SREP) for low income countries was established within the Strategic Climate Fund. Its principal objective is to help low income countries make a transformational change to low carbon administered by the World Bank energy pathways by optimally exploiting their renewable energy potential to offset fossil-based energy supply. SREP helps capture other co-benefits such as reduced local air pollution, improved climate resilience and the diffusion of low carbon technologies and industries, while reducing greenhouse gas emissions.7
The SREP co-finances multilateral development bank (MDB) investments, with the aim of shifting generation of energy to renewables in place of conventional fuels such as oil and coal. Kenya is one of the six Pilot Countries selected to benefit from SREP. The SREP program will support Kenya’s initiatives towards achieving a transformational change that will lead the country towards a low greenhouse gas (GHG) emission development pathway by harnessing the abundant renewable energy resources in Kenya.8
The following projects have been selected for implementation under SREP in order of priority:
- 400 MW of geothermal power generation in Kenya
- Hybrid Mini-Grid Systems
- Solar Water Heating.
SREP’s total contribution in Kenya is estimated at $85 million. SREP funding is provided for the above projects for a range of purposes, including feasibility studies, investment in physical infrastructure and capacity building. SREP will be providing funding alongside MDBs, DFIs, Kenyan government agencies and the private sector.
Kenya and REDD+
As a UN-REDD partner country and one of the African nations involved with the Forest Carbon Partnership Facility (FCPF), Kenya has exhibited a strong political will to engage in multilateral mechanisms to deal with deforestation. Kenya’s 2010 Constitution and the Forest Act 2007 provide a good starting point for considering how to secure forest carbon tenure. Kenya’s REDD+ preparations have shown a willingness to test different approaches to benefit sharing in order to support community participation in forest management. Moreover, Kenya has acknowledged a role for the private sector in its REDD+ strategy and the need for economic incentive schemes. Nevertheless, land tenure insecurity and community land ownership issues do pose a challenge to forest carbon rights in Kenya.
The Government has an ambitious plan for reforestation, as forest cover is down to 1.7 per cent from 12 per cent only 30 years ago. As part of Kenya’s NCCRS, the Government plans to encourage the manufacturing sector to grow trees for fuel switching from fossil fuels9 and to pursue innovative funding mechanisms for forestry development10.