Kenya to benefit from European Geothermal Energy Fund of 10 billion shillings
Capital markets
Kenya to benefit from European Geothermal Energy Fund of 10 billion shillings
Thursday, July 22, 2021
Geothermal well in Olkaria. PHOTO | DEPOSIT
summary
- The European Investment Bank (EIB) – an investment arm of the EU – last Saturday approved funding targeting privately-led geothermal energy projects in East Africa.
- The funding will benefit projects in Kenya and 17 other countries, including Ethiopia, Rwanda, Tanzania, Uganda, Mauritius, Mozambique and Madagascar.
Kenya is among the countries expected to receive 10.2 billion shillings (80 million euros) from the European Union’s investment arm to increase geothermal energy production.
The European Investment Bank (EIB) – an investment arm of the EU – last Saturday approved funding targeting privately-led geothermal energy projects in East Africa.
The funding will benefit projects in Kenya and 17 other countries, including Ethiopia, Rwanda, Tanzania, Uganda, Mauritius, Mozambique and Madagascar.
“Eligible projects will generally include the development of new facilities and extensions of brownfields, with proven geothermal resources,” the EIB said.
“Investments in geothermal energy will help diversify the supply of basic renewable electricity in the region and help reduce greenhouse gas emissions compared to alternatives based on fossil fuels. “
The money is part of the global 4.1 billion euros (522 billion shillings) the bank has allocated to the private sector to accelerate investments in renewable energy.
The funding is a boost to Kenya, which is in the race to further reduce the share of expensive geothermal energy in the national grid by increasing production from geothermal, wind and hydroelectric sources.
Data from the Energy and Petroleum Regulatory Authority show that geothermal energy is the main contributor of electricity to the national grid, accounting for 44.12%, followed by hydropower at 26.98%. Thermal is less than 13 percent.
This contrasts with 2014, when thermal’s share peaked at 34.49 percent due to erratic rains that reduced hydroelectric power sources.
The EIB has been working with Kenya since 1976 and has supported various projects, including the Olkaria geothermal power plants and the Lake Turkana wind farm.
Information on the EIB website shows that the bank has so far spent 1.534 billion euros (195.54 billion shillings) on projects in various sectors in Kenya, including energy, agriculture and health.
Projects in the energy sector, including Lake Turkana Wind Power, Olkaria Geothermal Power and Kenya’s Power Grid Development, account for 95.1 billion shillings or 49% of total funding.
Last year, the EIB spent 12.23 billion shillings (96 million euros) on three projects in Kenya, including 3.1 billion shillings for the Kenya Agriculture Value Chain facility.
