Kenya's open-ended green energy fund

Kenya Green Energy Fund

Towards the end of last year Kenya received a boost to their renewable energy plans when the World Bank announced it will be standing behind Kenya's recent efforts to switch from hydro dependency to more concerted renewable energy efforts as drought and water scarcity becomes a major obstacle to its energy plans.

Research has shown that Kenya has the capacity to produce its entire electricity requirements from clean energy sources as wind energy alone stands at 2000MW.

Now, Kenya, east Africa's largest economy, have announced it plans to launch an open-ended green energy fund in the next fiscal year to step up generation of environmentally friendly energy, a senior government official said on Thursday.

Kenya's electricity supply relies heavily on hydro-electric dams and this has previously led to blackouts whenever rains fail and growing demand has stretched state utility firms and the infrastructure they have installed.

"Turning to green energy"

"To address those challenges, we are turning to green energy. Kenya cannot depend on hydro because of our climatic hydrology conditions," Geoffrey Mwau, economic secretary at the Ministry of Finance, told Reuters.

The fund will be used to help firms and other institutions to generate clean energy and manufacture energy-efficient light bulbs and other appliances. PlanetArk.com reports that the fund will lend to viable projects at concessional rates while the second will be a trust fund for training and research in a country that holds huge potential for renewable energy like geothermal, wind and solar.

Mwau also told reporters that the loan facility will provide concessional loans to companies and other institutes that "want to invest in green energy", adding that the money would be disbursed through approved commercial banks.

The companies expected to receive the majority of funding are large electricity consumers like cement makers and other large manufacturers, how long the fund will run for is as yet undecided but the government have insisted they are likely to commit around 2 billion shillings (US$26.52 million).

"Earning carbon credits"

The Kenyan government will contribute around 10 percent to the facility, but will be assisted by a consortium of development partners and that the green cash will be included in the budget for the next financial year. A number of donors have already come forward in their willingness to help Kenya fulfill their green vision, including the French International Development Agency, Germany's Kfw, World Bank Britain's DFID, and Japan's JICA.

Mwau said the initiative, which was initially slated for launch by last month before a prolonged drought caused its delay, would help the country add 2,00O MW of electricity by 2012 besides other benefits.

"We are contributing to the reduction of greenhouse gases emissions so some of these projects will even earn carbon credits," he said.

One of the major benefits that comes from extensive green investment is the creation of jobs, this consequently improves peoples lives and even the poor urban populations can get involved by doing things like collecting refuse for energy generation.

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