NAIROBI, Kenya, Sep 24 – The International Finance Corporation (IFC) plans to invest close to $100 million (Sh8 billion) for sustainable energy projects in Kenya over the next five years.
IFC Climate Change Investment Programme Manager Paul Kirai said the money aims at creating linkages between energy service providers and financial institutions.
“IFC’s work in sustainable energy finance around the world has proven how financial mechanisms can be used to unlock millions of dollars that contribute to increasing energy efficiency and access,” Mr Kirai said.
An IFC commissioned study showed that lack of appropriate finance options and weak market integration were the two most serious barriers slowing growth in Kenya’s sustainable energy market.
Mr Kirai said IFC was ready to partner with 14 local banks to finance viable energy projects across the country. He did, however, say there would be a bias towards renewable energy but said each project would be assessed on an individual basis.
The Ministry of Energy has said the country has a geothermal potential of 7,000 megawatts. The ministry is targeting to tap 5,000 megawatts of geothermal by 2030.
Energy Minister Kiraitu Murungi said earlier in the month that the country had great potential in wind energy production that has remained greatly underutilised.
“We have very good wind regimes in northern Kenya. The ministry is now engaged in collecting data, which we will share with investors to develop it, Mr Murungi said.
The study also identified a number of sectors such as agribusiness, hotels, healthcare and infrastructure that could immediately benefit from sustainable and renewable energy projects.
Mr Kirai said the government had identified an immediate market of renewable energy worth $2.5 billion (Sh202.3 billion) open to private sector investment.
“We are working through the bank and around the bank and finding the projects and we even hold seminars for project developers who are looking for financing to implement projects,” he said.