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Harnessing Climate-Resilient Geothermal Energy in Kenya

Case Summary: 

With hydropower making up around 49% of installed electricity capacity in Kenya, the county’s power system is increasingly vulnerable to climate change impacts such as erratic rainfall and recurrent droughts. At the same time, an estimated 77% of the Kenyan population does not have access to electricity and power demand is quickly growing as the economy rapidly expands. To address these challenges, Kenya’s “Vision 2030” emphasizes the use of geothermal energy as a stable, low-carbon, and climate resilient renewable energy resource. Under the Vision, GoK plans to increase geothermal capacity by 2,000% (up to 5,530 MW) by 2030. In alignment with Vision 2030, two geothermal projects are currently certified under the Clean Development Mechanism and will contribute 320,000 tCO2e in avoided greenhouse gases. Highlighted below are several actions and good practices, profiled in this case study, supporting Kenya’s geothermal expansion plans under Vision 2030.

  • Development of an enabling investment environment for geothermal development via policy changes - feed-in tariffs, zero-rated import tax on renewable energy equipment, eliminating value-added tax for renewable energy materials, assistance for public-private partnerships and backing for loans. An example of a positive impact through the implementation of feed-in tariffs has been the ability for small businesses to use savings to further expand other types of renewable energy capacity.
  • Decentralization of the Ministry of Energy by forming specialized institutions, each with a specific regulatory authority – policy, energy generation and finance. One example, the Geothermal Development Company, a semi-autonomous state-owned company was formed with the primary goal of mitigating financial risks in the early stages of geothermal development – exploration, appraisal and drilling. This company has been responsible for working towards underwriting risk, securing insurance and attracting external development partners.
  • Encouragement of public-private partnerships in which the public sector absorbs the high cost of the initial stages and the private sector focuses on financing the construction phase.
  • Establishment of in-house training programs in collaboration with foreign partners enabled capacity building. These training programs were organized by the specialized institutions.
  • Stakeholder engagement from the onset of the plans have garnered support from communities in the vicinity of the geothermal projects.
Country 
Kenya
Action Area 
Adaptation, Mitigation, Cross-cutting
Planning and Implementation Activity 
Developing and Implementing Policies and Measures, Governance and Stakeholder Engagement
Sectors and Themes 
Renewable Energy
Source 
Climate and Development Knowledge Network (CDKN)
Language 
English