The French Ambassador to Kenya, H.E. Rémi Marechaux and the Chief Executive Officer of Kenya Association of Manufacturers (KAM) Ms. Betty Maina together with the EU Ambassador to Kenya, H.E. Mr Lodewilk Briet and Mr Yves Terracol, Regional Director of AFD Nairobi Office have today signed a two year project of 2.1 Million Euros (approximately Ksh 239 Million) for providing the phase II of the technical assistance to renewable energy (RE) and energy efficiency (EE) investments in Kenya, Uganda and Tanzania. This project is funded by the Africa Infrastructure Trust Fund of the European Union.
The project, dubbed with Regional Technical Assistance Programme (“RTAP”), is part of a package which also comprises environmental credit lines extended by AFD to local banks in Kenya, Uganda and Tanzania.
The RTAP project mainly aims at providing support for the financing of selected investments in renewable energy projects of small hydro, biomass, cogeneration and solar as well as in energy efficiency projects, especially in the agribusiness, manufacturing and hospitality sectors in the three countries. The objective is to make renewable energy and energy efficiency financing a standard business model that can be adopted by the local banks to support and diversify their revenue streams.
The RTAP is located in Nairobi and organized as a regional platform with a pool of experts, who have contributed to the development of capacities in the three countries through the transfer of skills to project sponsors and credit officers, in order to help the development of RE / EE projects in the region.
The RTAP has been successful in identifying projects (the portfolio includes about 96 projects) and in providing various supports to different stakeholders. Its capacity and the relevancy of its action are well known in the Region. During Phase I, the RTA team has identified a significant pipeline in the three countries, consisting of 96 projects potentially eligible to AFD credit lines. The proposed projects involve renewable energy technologies (small hydro, biomass, biogas, solar, geothermal) as well as energy efficiency measures.
The concept of providing an affordable credit lines together with a technical assistance component has proven to be highly successful in changing how the EE and RE markets operate in East Africa. In East Africa the demand for energy has been rising steadily over the years characterised by an intensive use of biomass fuel (wood, charcoal). In Kenya alone, this demand represents 68 per cent of the total primary energy requirements, equivalent to 12 million tonnes of oil (TOE) per year. The figure stands is 94 per cent in Uganda and 90 per cent in Tanzania, a factor that has resulted in the massive depletion of natural resources in the three countries.
This combined with other trends including the region’s increased demand for power, deforestation and continued use of fossil fuels to meet this demand, green house gases emissions are bound to rise sharply. Therefore, the region’s transition process toward renewable energy sources is essential so as to mitigate climate change and reduce the cost of power.
The EE/ER RTAP Project is therefore particularly important because of the fact that it aims to bring additional solutions to achieve the diversification of energy resources in the East African region and help the region’s transition towards sustainable energy solutions that are technically, economically and financially viable.
The energy efficiency (EE) and renewable energy (RE) projects, will additionally greatly contribute towards the improvement of the businesses sustainability and competitiveness, through the provision and facilitation of a more secure power supply and a lower energy bill, thereby boosting the regional dynamic towards “green energy”.