IFC, a member of the World Bank Group, said today it can help mobilize an estimated $100 million for sustainable energy projects in Kenya over the next five years, representing a significant opportunity for the private sector to support initiatives that will increase access to electricity while reducing carbon emissions.
IFC’s Climate Change Investment Program in Africa (CIPA) is providing advisory services and investments to financial institutions in Kenya, helping them build a market for sustainable and renewable energy projects. CIPA is also focusing on capacity building and raising awareness around sustainable energy investments.
An IFC commissioned study identified a number of sectors in Kenya that could immediately benefit from sustainable and renewable energy projects, including: food and beverages; agribusiness; hotels; cement, healthcare (hospitals); and infrastructure (commercial and government buildings).
The study analyzed market barriers to sustainable energy finance in Kenya and suggests ways to overcome them. It focused on the demand for and supply of suitable financing mechanisms, market development, and the policy environment.
It estimated that IFC – working through financial institutions – could catalyze an initial investment of $100 million in sustainable energy projects over the next five years. Kenya’s government has identified an immediate market of renewable energy projects worth at least $2.5 billion open to private sector investment.
According to the IFC study, a lack of appropriate finance options and weak market integration are the two most serious barriers slowing growth in Kenya’s sustainable energy market.
Paul Kirai, IFC CIPA Program Manager for Sub-Saharan Africa, said, "IFC’s work in sustainable energy finance around the world has proven how financial mechanisms can be used to unlock millions of dollars worth of investments that contribute to increasing energy efficiency and access to energy. Over time, this will allow more people to access clean energy, and will help businesses reduce energy costs, increase competitiveness, and cut greenhouse gas emissions.”