May 2016 saw flurry of activity in Kenya’s renewable energy sector. We have set out below some of the industry’s key highlights:
• The Kenyan government signed a Memorandum of Understanding (MOU) with the government of the UK to bolster Kenya’s renewable energy sector. A press release disseminated from the British High Commission in Nairobi and published on 17th May 2016, stated that UK Export Finance has, as an integral part of the MOU, “affirmed its interest in considering requests for export financing or insurance for eligible renewable energy projects in Kenya, drawing on a risk appetite of up to at least GBP 250 million (USD 323.7 million)”. No information has been released as yet on what constitutes an eligible project.
• The African Development Bank indicated that the construction of the first phase of the Menengai Geothermal Power Plant will be complete by July 2016. The first phase of the project is expected to produce up to 400 MW. The overall project has a potential of producing 1600 MW once fully commissioned.
• The Cabinet Secretary for Energy, Charles Keter relayed the government’s enthusiasm for the participation of private investors in the geothermal space at a geothermal consultative forum held in Nairobi on 22nd May 2016. He emphasised the importance of fast-tracking the Energy Bill 2015, currently before the Senate. The proposed law includes enabling regulatory structures for the participation of independent power producers.
Kenya’s vast renewable energy resources remain largely untapped. One of the principal reasons for this is the financing gap in projects conceived by the government. To remedy this, the government has sought to both collaborate with friendly countries, such as the UK and the overhaul of the country’s energy regulatory structure to make it more attractive to investors. The Energy Bill will end Kenya Power and Lighting Company’s electricity distribution monopoly and create a leeway for independent power producers to participate in the sector.
Solar firm seeks nod to challenge Kenya Power monopoly, Business Daily
State keen on ending KPLC's monopoly, The Star
State moves to woo geothermal investors, Mediamax.
This article first appeared in the Oraro & Company Advocates website (www.oraro.co.ke) on 11th July 2016.
(These articles are of a general nature; the developments and impact of these legislative developments have only been summarized here. This report is not intended to address the circumstances of any particular individual or entity. While the information is accurate as at date hereof, there can be no guarantee that the information is accurate as of the date it is received or that it will continue to be accurate in the future. No one should act upon such information without appropriate professional advice and after a thorough examination of the particular situation).