Kenya and the African Trade and Investment Development Insurance (ATIDI) have entered into a memorandum of understanding to collaborate on identifying, developing, and implementing renewable energy projects in Kenya. The agreement aims to provide financial guarantees to independent power producers in Kenya who sell their electricity to state-owned power utilities.
ATIDI’s CEO, Manuel Moses, stated that these financial guarantees will be crucial in sending a positive message to project developers, lenders, and other stakeholders interested in investing in Kenya’s energy sector. This initiative is expected to further drive the growth of renewable energy projects in the country.
Currently, Kenya has an installed electricity capacity of around 3,000 MW, with 86 percent of this capacity being sourced from renewable energy. ATIDI will issue insurance policies, backed by cash collateral, to independent power producers or private transmission companies for a maximum tenure of up to 15 years, according to Moses.
Through this collaboration, ATIDI aims to engage with independent power producers in Kenya to facilitate the implementation of additional hydro, geothermal, solar, and wind projects. This partnership is expected to enhance the supply of renewable energy in Kenya while mitigating risks for independent power producers.
The Ministry of Energy and Petroleum, represented by cabinet secretary Davis Chirchir, highlighted that this collaboration will help protect independent power producers against the risk of delayed payments by state-owned utilities. This support will encourage more private sector participation in the renewable energy sector.
Njuguna Ndung’u, cabinet secretary of the National Treasury, emphasized Kenya’s commitment to promoting private sector involvement in renewable energy development. This agreement is seen as a step towards advancing green energy projects in the country without relying heavily on government-backed credit enhancement tools.
