Kenya
Kenya has made significant progress in deploying renewable energy, and has an opportunity to invest in further development of energy transition technologies. However, reports in our directory highlight the need for more attention to vulnerable populations, financing strategies and a broader environment ready to support other energy transition technologies like electric mobility.
What is in the directory about Kenya?
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Overview
Kenya is well suited for a diverse mix of renewables, including geothermal, wind, and decentralized solar systems. Already, renewables are responsible for 90% of electricity generation as of June 2024 (afripo-000024), but the rapidly growing economy and the need to decarbonize other sectors, like transportation, require continued policy improvements and investment.
Moreover, despite the success of expanding renewables, government policies as recently as the 2025 National Energy Policy of Kenya included development of coal, oil, and gas resources inconsistent with broader clean energy and climate policies (natjust-000150). Investing in additional fossil fuels doesn’t make sense when reports in our collection point to a strong economic opportunity to create jobs and economic benefits focused on green industries (fsdafri-000232, fsdafri-000143, seforall-000152, newclim-000089).
What is needed to expand renewables investment in Kenya?
The general focus of organizations expanding on the success of Kenya’s investments has been supporting capital flows into the market. A 2023 estimate found that 63% of all cleantech investment going into Sub-Saharan Africa was concentrated in Kenya (afripo-000030).
The policy environment also continues to be favorable for funding renewables. In particular, efforts like the Feed-in Tariff program, first introduced in 2008, and a broad commitment to electrification have expanded grid access and off-grid solutions throughout the country (sei-001068). A 2025 evaluation by the Stockholm Environment Institute highlighted several key opportunities for reducing risk, such as improving offtake strategies and utility governance (sei-001068).
Historically, the government of Kenya has been proactive in reducing financial investment risks in renewables—such as through the establishment of the Geothermal Development Company in 2009 (cdkn-000669). Additionally, international development banks have provided blended finance for key projects like the Turkana Wind Project, the Kopere Wind Project, and the Menengai Geothermal Project (saiia-000984). However, de-risking more capital-intensive initiatives still requires enhanced financing mechanisms to ensure projects are properly reinsured, as highlighted in a 2024 case study by FSD Africa (fsdafri-000213).
Green industry investments offer strong opportunities for employment growth in renewables, making Kenya—alongside South Africa and Nigeria—a primary hotspot for clean energy jobs, according to a 2024 estimate by FSD Africa (fsdafri-000143).
What challenges do local communities still have with energy access in Kenya?
Three other themes emerged in case studies and analyses: funding is concentrated in larger projects but does not always reach vulnerable populations (sei-001326); operations of local mini-grids need deliberate long-term financing strategies not currently supported by policy (wri-000133, sei-001296, seforall-000168); and large-scale renewable projects like geothermal and wind farms require greater consultation with communities over health and land-use impacts (prio-000975, prio-001028, natjust-000146).
Several recent studies also show high prices slow the market down: in January 2026 a report from Stockholm Environment Institute highlights a pattern of users trying to leave the grid and generate their own electricity (sei-001326); and a June 2025 Africa Policy Research Institute research report highlighted how electric vehicle and battery import tariffs make those technologies a luxury on top of high grid generated energy costs (afripo-000024). Multiple case studies on clean cooking (e.g. sei-001747) and electric vehicles (e.g., afripo-000110) reiterate this analysis.
Does Kenya still need to expand its fossil fuel capacity?
While the country has a significant advantage when it comes to decarbonization, recently discovered fossil fuel deposits have been tempting for policymakers since at least 2014. Natural Justice published an extensive evidence-based statement challenging those assumptions in the 2025 Kenya National Energy Policy (natjust-000150).
Several organizations in our collection highlight the decision-making process behind the Lamu coal plant as a case study in misdirected energy investment. To read more about the cancellation of the project, check out this article on Global Energy Monitor. At the time, the NewClimate Institute described the plant as likely to increase energy prices and increase exposure to air pollution in affected communities (newclimate-00080). Furthermore, grid capacity analysis showed that oversupplying coal power in one location could harm the uptake of more variable renewable energy (newclim-000025).
The argument for needing more fossil fuels for energy, is also not very credible when Kenya has ample baseload dispatchable energy from geothermal and hydroelectric dams that can supplement the variability of solar and wind (newclim-000025).
Perspectives
Who takes the risk when investors build geothermal and wind in Kenya?
Kenya has been a pioneer of several de risking strategies, such as reducing exploration risk with the the Geothermal Development Corporation and supporting other financial arrangements with international investors.
Insights
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Each insight is extracted from a source document by a language model, then read and approved by an editor before it appears here. The editor chooses which insights answer the question and in what order; insights are summaries of key information from the original source.
The Kenyan government mitigated exploration risk by providing data and donating eight wells (with 8 MW capacity, valued at approximately USD 24 million) to Ormat Technologies. Without this support, the project's internal rate of return (IRR) would have dropped from 16% to 13%, which would have required a 15% increase in the power purchase agreement (PPA) tariff to attract private investment.
Climate Policy InitiativeUsing Public Finance to Attract Private Investment in Geothermal: Olkaria III Case Study, Kenya, 2015The 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.
Climate and Development Knowledge NetworkHarnessing geothermal energy: The case of Kenya, 2013To unlock long-term debt financing, the Government of Kenya provided a security package to back payments from the off-taker, Kenya Power and Lighting Company (KPLC). This package included a letter of credit and a letter of comfort, which improved the creditworthiness of the off-taker.
Climate Policy InitiativeUsing Public Finance to Attract Private Investment in Geothermal: Olkaria III Case Study, Kenya, 2015
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Blended finance and risk mitigation instruments have been critical for Kenyan projects. Examples include the African Development Bank's Partial Risk Guarantee for the 300MW Turkana Wind Project, the use of the EU-Africa Infrastructure Trust Fund to fill equity gaps, and concessional loans from the AfDB for the 50MW Kopere Wind Project to improve debt service coverage ratios.
South African Institute of International AffairsInnovative Green Financing for Energy Access: Insights from Kenya, 2020In Kenya, four companies—ICEA Lion (lead), Sanlam, APA, and Mayfair—have committed to be founding members of the underwriting facility. A training programme for their technical underwriting staff began on 14 June, and the Kenyan regulator is expected to be supportive of the facility and the associated reinsurance vehicle created by Parhelion.
FSD AfricaGeothermal Risk Transfer Facility, 2022
Will the energy transition create jobs in Kenya, and who might lose out?
Multiple recent projections in our collection highlight opportunities to add 100s of thousands of jobs in the next decades around the green economy.
Insights
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Each insight is extracted from a source document by a language model, then read and approved by an editor before it appears here. The editor chooses which insights answer the question and in what order; insights are summaries of key information from the original source.
Kenya's green employment is projected to grow from 364,000 jobs in 2030 to 2.6 million by 2050. Its 2030 market is more sectorally balanced than its peers, with significant shares in clean cooking (19%), solar home systems (18%), distributed renewable energy (17%), and utility solar (16%).
FSD AfricaOpportunities Towards a Green and Inclusive Workforce, 2026The energy transition is projected to support approximately 500,000 net additional jobs by 2050. Significant job creation is expected in the construction and maintenance of EV charging and hydrogen fueling infrastructure, as well as the construction of renewable generation assets.
Sustainable Energy for AllKENYA ENERGY TRANSITION & INVESTMENT PLAN 2023 - 2050, 2023Decision-making in the energy sector is skewed toward those with resources and information, marginalizing vulnerable groups. Additionally, there has been little attention paid to the potential job losses in the biomass and fossil fuel sectors, such as for charcoal vendors and petrol station attendants, during the transition.
Stockholm Environment InstitutePolicy coherence for a just energy transition in Kenya’s electricity sector, 2026
How risky of a market is Kenya for renewables?
Industrial and electricity policy policy has created an environment that benefits the cleantech and renewable investment, however, there are still opportunities to further reform the policy environment to encourage external investment.
Insights
AI-generated
Each insight is extracted from a source document by a language model, then read and approved by an editor before it appears here. The editor chooses which insights answer the question and in what order; insights are summaries of key information from the original source.
Kenya is a leading clean tech hub, attracting 63% of Africa's cleantech investment in 2023. Its IPR ecosystem is supported by the Constitution of Kenya (2010), the Industrial Property Act (2001), and the Trademarks Act (Cap 506), though these laws do not yet contain explicit provisions specifically for greentech.
Africa Policy Research InstituteVon der Idee zum Arbeitsplatz: Nutzung von Rechten des geistigen Eigentums zur Förderung lokaler Innovationen in KMU-en, 2025Despite Kenya's position as a regional leader in private sector involvement in renewable energy, it remains susceptible to macroeconomic pressures, offtaker challenges, and transmission delays, which impact investor confidence. The report concludes that while financial guarantees and insurance are helpful, long-term reduction in the need for risk mitigation requires systemic improvements in utility performance and governance.
Stockholm Environment InstituteRisk mitigation and transfer in renewable energy investments in East Africa, 2025Achieving universal energy access requires both centralized and decentralized power, but they face different challenges. While the Last-Mile Connectivity Project increased electricity access from 27% to 60%, full national grid roll-out is not economically feasible. Decentralized systems, such as mini-grids, struggle with a lack of regulatory clarity regarding tariff-setting and competition with public actors.
Stockholm Environment InstituteEnergy pathways for achieving Kenyas nationally determined contribution to global efforts to mitigate climate change, 2017
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Political risk was mitigated through Political Risk Insurance (PRI) provided by the Multilateral Investment Guarantee Agency (MIGA), which covered equity exposure against transfer restriction, war, civil disturbance, and expropriation at an annual premium of approximately 2%.
Climate Policy InitiativeUsing Public Finance to Attract Private Investment in Geothermal: Olkaria III Case Study, Kenya, 2015
What are the most significant opportunities for green energy infrastructure in Kenya?
The recent reports in our collection highlight the success of a renewable rollout and larger greentech sector. However, batteries, electric mobility and other new technologies still need additional investment in order to create a more equitable energy transition that benefits all parts of society.
Insights
AI-generated
Each insight is extracted from a source document by a language model, then read and approved by an editor before it appears here. The editor chooses which insights answer the question and in what order; insights are summaries of key information from the original source.
Prioritizing investments in grid and off-grid renewable power generation, alongside battery storage and infrastructure upgrades, offers the highest synergetic potential for Kenya. Such investments can simultaneously reduce emissions, accelerate industrialization, create jobs, increase energy access, and reduce social inequalities for vulnerable groups including women, youth, and people with disabilities.
Stockholm Environment InstitutePolicy coherence for a just energy transition in Kenya’s electricity sector, 2026Since the system was commissioned, solar energy and battery storage have supplied approximately 95% of the facility's electricity consumption, reducing reliance on the grid and protecting against utility outages.
Alliance for Renewable ElectrificationSolar & battery storage transform energy reliability at a school in Mombasa, Kenya, 2026There is a significant gap in the formal recognition and integration of IKS within e-mobility policy and education. The 'jua kali' (informal) sector is largely ignored by existing policies despite its potential for homegrown battery repair and component manufacturing. While the government has a Recognition of Prior Learning (RPL) system, there are no specific controls to regulate informal IKS for e-mobility skills, and most technical training is provided by a few institutions like Spiro Academy and Strathmore University.
Africa Policy Research InstituteEstablishing Connections Between E-mobility Innovation and Indigenous Knowledge: Insights from Kenya, 2025
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Six primary decarbonization technologies are identified to anchor the transition: renewables, low-carbon hydrogen, battery electric vehicles, clean cookstoves, carbon capture and storage (CCS), and negative-emission solutions. Renewables, electrification, and clean cooking are expected to drive the most substantial abatement.
Sustainable Energy for AllKENYA ENERGY TRANSITION & INVESTMENT PLAN 2023 - 2050, 2023Burhani Solar installed a 64 kWp solar PV system and 92 kWh of battery energy storage at a school in Mombasa, Kenya, to lower electricity costs and mitigate grid instability.
Alliance for Renewable ElectrificationSolar & battery storage transform energy reliability at a school in Mombasa, Kenya, 2026