Harnessing geothermal energy: The case of Kenya

This policy brief examines Kenya's strategic shift toward geothermal energy to reduce reliance on climate-vulnerable hydropower and expand energy access. It details the institutional reforms, financial mechanisms, and policy tools the Government of Kenya has implemented to mitigate the high risks associated with geothermal exploration and development.

• Kenya has historically relied on hydroelectricity, but this has created vulnerability to climate change, as droughts and erratic rainfall make hydropower unreliable. To address this, Kenya's Vision 2030 prioritises low-carbon development, positioning geothermal energy as a critical, stable base load source that is not affected by climatic variability.
• The Kenyan Rift Valley has an estimated geothermal potential of 7,000–10,000 megawatts (MW). Between 2004 and 2011, geothermal energy saw a 58% increase in installed capacity, and the government intends to increase this capacity to twice that of fossil fuels by 2030.
• The Government of Kenya established the Geothermal Development Company (GDC) in 2009 as a semi-autonomous state-owned vehicle to fast-track the sector. The GDC's primary role is to mitigate the high financial risks of the early stages of development—specifically exploration, appraisal, and production drilling—which the private sector is typically unable to absorb.
• Kenya has implemented several policy measures to stimulate renewable energy investment, including the introduction of feed-in tariffs in 2008 (revised in 2010), the removal of value-added tax (VAT) on renewable energy materials prior to 2011, and the introduction of zero-rated import duties on renewable energy equipment.
• Geothermal energy provides both direct and indirect development benefits. Direct uses include eco-tourism, agriculture (such as flower and legume growth for Oserian Company in Naivasha), and milk processing. Indirect benefits include rural electrification, which improves the delivery of social and business services like schools and water pumps.
• Kenya has accessed diverse funding sources by aligning geothermal projects with climate and development goals. This includes carbon finance via the Clean Development Mechanism (CDM), where two projects avoid over 320,000 tonnes of CO2 equivalent annually, and a US$50 million allocation from the Program for Scaling-Up Renewable Energy in Low Income Countries, with up to US$40 million for geothermal.
• Despite progress, the sector faces constraints including a limited pool of domestic technical experts, difficult geological formations in areas like the Menengai field, and investor reluctance due to the high risk of drilling 'dry wells' and perceived country risks such as political instability.

APA

Kollikho, P., & Rivard, B. (2013). Harnessing geothermal energy: The case of Kenya. Climate and Development Knowledge Network. https://cdkn.org/sites/default/files/files/Kenya_InsideStory-Pr3Final_WEB1.pdf

Chicago

Kollikho, Pius, and Benoît Rivard. Harnessing geothermal energy: The case of Kenya. Climate and Development Knowledge Network, 2013. https://cdkn.org/sites/default/files/files/Kenya_InsideStory-Pr3Final_WEB1.pdf.

Wikipedia

{{cite report |last1=Kollikho |first1=Pius |last2=Rivard |first2=Benoît |title=Harnessing geothermal energy: The case of Kenya |publisher=Climate and Development Knowledge Network |date=January 2013 |url=https://cdkn.org/sites/default/files/files/Kenya_InsideStory-Pr3Final_WEB1.pdf |access-date=17 August 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{kollikho2013harnessing, author = {Kollikho, Pius and Rivard, Benoît}, title = {{Harnessing geothermal energy: The case of Kenya}}, institution = {Climate and Development Knowledge Network}, year = {2013}, month = jan, url = {https://cdkn.org/sites/default/files/files/Kenya_InsideStory-Pr3Final_WEB1.pdf}, urldate = {2026-08-17}, note = {Indexed by Climate Insights Directory} }