The European Union investment arm has provided an €80 million funding ($94 million) to increase geothermal power production in East Africa. Kenya is one of the countries set to benefit from this funding.
The funding will benefit projects in Kenya and 17 other countries, including Ethiopia, Rwanda, Tanzania, Uganda, Mauritius, Mozambique, and Madagascar.
The European Investment Bank (EIB) an investment arm of the EU approved the funding last week Saturday targeting private sector-led geothermal power projects in East Africa.
EIB said “eligible projects will typically include greenfield development and brownfield expansions, with proven geothermal resources.”
“Investments in geothermal energy will help diversify baseload renewable electricity supply in the region and contribute to the reduction in greenhouse gas emissions compared to fossil-fuel based alternatives.”
The funding is part of the global €4.1 billion ($4.8 billion) that the bank has lined up for the private sector to accelerate renewable energy investment.
The funding is a boost to Kenya, which is in the race to cut further the share of expensive geothermal power in the national grid by raising the output of geothermal, wind, and hydropower sources.
Energy and Petroleum Regulatory Authority data shows geothermal is the leading contributor of power to the national grid, accounting for 44.12 percent followed by hydropower at 26.98 percent. Thermal is below 13 percent.
This is in contrast to 2014 when the share of thermal was at a high of 34.49 percent due to erratic rains that reduced hydropower sources.
EIB has worked with Kenya since 1976 and supported different projects including Olkaria geothermal plants and the Lake Turkana Wind Farm.
The bank has so far spent €1.534 billion ($1.8 billion) on projects in diverse sectors in Kenya including energy, agriculture, and health.
Projects in the energy sector including Lake Turkana Wind Power, Olkaria geothermal, and Kenya Power grid development account for Ksh95.1 billion ($878.9 million) or 49 percent of the total funding.
EIB last year spent €96 million ($113 million) on three projects in Kenya including Ksh3.1 billion ($28.6 million) for the Kenya Agriculture Value Chain facility.