Innovative Green Financing for Energy Access: Insights from Kenya

The document argues that public funds alone cannot meet Africa's growing energy demands, which require an estimated $120 billion annual investment until 2040. It advocates for 'green financing'—blending public and private capital—to overcome high infrastructure costs and investment risks. Using Kenya's experience, the brief details how instruments like Partial Risk Guarantees, concessional loans, and Feed-in Tariffs have attracted private investment for wind, solar, and geothermal projects. It specifically recommends that the EU and development partners provide technical assistance and risk-mitigation products to create enabling environments for private sector energy investments across the continent.

• Africa faces a significant energy gap, with 640 million people lacking electricity and an access rate of 40%, the lowest globally. Meeting electricity demands will require annual investments of $120 billion until 2040.
• While Africa possesses vast renewable potential in solar (10,000GW), wind (110GW), hydro (350GW), natural gas (400GW), and geothermal (15GW), high infrastructure costs for generation and transmission necessitate the use of green financing to blend public and private capital.
• Kenya has implemented specific policy and regulatory frameworks to attract renewable energy investment, including the Public Private Partnerships Act of 2013 and a Feed-in Tariff policy that allows producers to sell power at pre-determined rates for 20 years.
• Risk mitigation instruments have been critical for the bankability of Kenyan projects: the African Development Bank provided a Partial Risk Guarantee for the 300MW Turkana Wind Project, and the EU-Africa Infrastructure Trust Fund helped fill the equity gap.
• Concessional financing has been used to improve the financial viability of specific Kenyan projects, such as the 50MW Kopere Wind Project and the 105MW Menengai Geothermal Project, by mitigating credit risk and shoring up conventional financing.
• The document recommends that governments design national and sub-national incentive structures and that development partners provide technical assistance to help African governments create enabling environments for private sector energy investments.

APA

SOMORIN, O., & NDUHIU, M. (2020). Innovative Green Financing for Energy Access: Insights from Kenya. South African Institute of International Affairs. https://saiia.org.za/wp-content/uploads/2020/09/Policy-Briefing-217-somorin-nduhiu.pdf

Chicago

SOMORIN, OLUFUNSO, and MUTHONI NDUHIU. Innovative Green Financing for Energy Access: Insights from Kenya. South African Institute of International Affairs, 2020. https://saiia.org.za/wp-content/uploads/2020/09/Policy-Briefing-217-somorin-nduhiu.pdf.

Wikipedia

{{cite report |last1=SOMORIN |first1=OLUFUNSO |last2=NDUHIU |first2=MUTHONI |title=Innovative Green Financing for Energy Access: Insights from Kenya |publisher=South African Institute of International Affairs |date=September 2020 |url=https://saiia.org.za/wp-content/uploads/2020/09/Policy-Briefing-217-somorin-nduhiu.pdf |access-date=17 August 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{somorin2020innovative, author = {SOMORIN, OLUFUNSO and NDUHIU, MUTHONI}, title = {{Innovative Green Financing for Energy Access: Insights from Kenya}}, institution = {South African Institute of International Affairs}, year = {2020}, month = sep, url = {https://saiia.org.za/wp-content/uploads/2020/09/Policy-Briefing-217-somorin-nduhiu.pdf}, urldate = {2026-08-17}, note = {Indexed by Climate Insights Directory} }