Investing in Kenya - Fast-tracking investment in Kenya

Kenya’s IPP moratorium is set to be lifted in the coming months, with key players in the country now targeting the fast-tracking of investment, project implementation and supply increases to make up for lost time.

The lifting can’t come quickly enough, with the country falling short of the levels reached in the period leading up to 2018. As a result, job one as part of this fast-tracking, is simply to ensure safe and stable energy supply across the country.

However, the route to achieve this represents a diverse and enabling environment when it comes to the resources used, a more enabling investment landscape established, increased support provided by government, and a clear route to attract private investors back to the country’s energy sector.

Peter Njenga, Managing Director & CEO, KenGen addressed the diversity side of the equation by affirming Kenya’s dedication to not just renewables in the form of geothermal, but a range of green energy sources to improve both baseload levels and to further stabilise the entire network.

“We pride ourselves on geothermal where we are very experienced – our oldest plant is more than 40 years old. But there is still room to grow and to innovate, and we’re looking at both new technologies and the upgrading of existing systems.”

He also added hydro to the conversation, traditionally a more challenging resource in the country.

“We’re not left behind when it comes to solar, either,” he continued, before confirming that wind would also play a role in this multipronged approach to energy supply.

“It is a case of exploring new areas, fully harnessing existing infrastructure, and making the most of all opportunities. Our new strategy for the next 10 years includes 1,500MW of power being added across this diverse spread of resources.”

Regarding the moratorium, an initial attempt to have it lifted in 2023 required a further report from a dedicated committee, which will imminently be presented to parliament. There is confidence that this will put an end to the stagnancy, sparking revived interest in projects and investments that would accelerate this ambitious development plan.

This will also coincide with the construction of a new Least Cost Power Development Plan (LCPDP). It will aim to encourage a better balance between investors, consumers, industrial consumers and government interests, with the ultimate goal of bringing new capacity onstream. A whole-of-ecosystem approach to discussions is already taking place to ensure the energy landscape doesn’t just recover from recent setbacks, but that it returns to its strong levels long before 2018.

Attracting investors to the country, accelerating projects, rethinking how these projects are modelled, refining tariffs, and decreasing capacity gaps are all on the agenda as part of this new pending era for Kenyan energy.