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Climate finance to flow to Kenya as UK Prime Minister agrees with President Ruto to fast-track KES 500 billion of British investment

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  • UK Prime Minister Rishi Sunak and Kenyan President HE William Ruto met at the COP27 climate summit today [Monday 7 November].
  • The leaders agreed to fast-track six green investment projects worth KES 500 billion spanning green energy, agriculture and transport.
  • Sunak praised Kenya’s pioneering climate leadership and urged President Ruto to continue championing clean growth.

The UK and Kenya have agreed to fast-track six projects worth KES 500 billion to accelerate the flow of climate finance into Kenya after the UK Prime Minister and President Ruto met at the COP27 climate summit in Sharm-el-Sheik, Egypt.

These new, clean and green investments will become flagship projects of the UK-Kenya Strategic Partnership – an ambitious five-year agreement that is unlocking mutual benefits for the UK and Kenya.

The projects include: new geothermal and solar energy generation at Menegai and Malindi; a KES 425 billion Public Private Partnership to deliver the Grand High Falls Dam, which will generate a gigawatt of renewable power and provide an area over twice the size of the Maasai Mara with drought-combating irrigation solutions; the green regeneration of central Nairobi anchored around a new central rail station; and a Ksh 32 billion investment in a climate-resilient agriculture hub for the Lake Victoria region in Kisumu that will create 2,000 direct jobs and provide an income for a further 20,000 farmers.

The UK Government will commit KES 2 billion to a new guarantee company that will lower investment risk and unlock KES 12 bn of climate finance for Kenyan projects over the next 3 years, through collaboration with CPF Financial Services and other private investors.

The Prime Minister praised President Ruto’s pioneering climate leadership and urged Kenya to continue along the path of green growth, urging all countries to deliver on the commitments made at COP26 in Glasgow.

Throughout its COP26 Presidency, the UK has worked with partners across Africa to deliver and build on the Glasgow Climate Pact, and to see commitments made at COP26 turned into action. For example, in Kenya since COP26 £5.4m has been committed and £2.8m will be spent to support Kenya’s energy transition, unlocking private sector investment in forest protection and the Kenyan Government’s ambitious 10% forest cover target.

But the UK recognizes that there is further work to do. During his recent visit to Kenya, COP President Alok Sharma reaffirmed the need for progress on access to finance and transformational adaptation action by COP27.

British High Commissioner to Kenya Jane Marriott, said:

The UK and Kenya go far when we go together. By fast-tracking finance into these clean, green projects with honest, reliable investment the UK is supporting Kenya to advance and maintain its continent-leading climate credentials – with mutual benefits for both our countries.

EDITORS NOTES / BACKGROUND

Details of the projects to be fast-tracked

  1. Malindi Solar Expansion: KES 7.5 billion investment. A 40 MW solar plant, constructed by UK company Globeleq with finance from British International Investment, which was connected to the grid in December 2021. Plans will double the size of Malindi Solar and add battery storage – an additional Kes 7.5 billion investment – making over Kes 15 billion total.

  2. Menengai Geothermal: KES 2.5 billion investment. A 35 MW geothermal project led by GDC and Globeleq which will mark the full development of a field discovered by GDC. The project has a signed and effective Power Purchase Agreement with KPLC that confirms one of the cheapest tariffs for baseload renewable power.

  3. Grand High Falls Dam: KESe25 billion investment. A Public Private Partnership on the Tana River that will generate 1,000MW of hydroelectric energy capacity and irrigation for 400,000 hectares of farmland. Led by UK engineering firm GBM, the project is envisaged to include both a Power Purchase Agreement for clean energy and a Water Purchase Agreement for agricultural irrigation.

  4. Nairobi Railway City: KES e.5 billion investment. A green regeneration of central Nairobi, anchored around a new central rail station connected to Bus Rapid Transit, incorporating the latest innovations in green building technology and planning. The project has been developed with technical assistance from the UK Government and UK architects (Atkins) won the contract to design the new station.

  5. United Green: KES 31 billion investment. Climate-smart crop and agro-industrial processing system via a joint venture with Kisumu County that will create 2,000 direct jobs and provide an income for a further 20,000 farmers across counties the Lake Victoria region.

  6. Guarantees: The UK Government is collaborating with CPF Financial Services and other private investors, including Cardano Development, to launch a new guarantee company that will de-risk investments and unlock private finance from pension funds and insurance companies for projects in Kenya. The UK government will commit Kes 2 billion to the company, which will mobilize Kes 12 billion of new climate finance for Kenyan infrastructure over the next 3 years.

The UK’s Partnership for Accelerated Climate Transition (UK PACT) program is supporting projects in Kenya, Nigeria and South Africa. For example, in Kenya since COP26 £5.4m has been committed and £2.8m will be spent to support Kenya’s energy transition, unlocking private sector investment in forest protection and the Kenyan Government’s ambitious 10% forest cover target.

Launched under its COP26 Presidency to accelerate clean energy transitions, the UK will continue to support the multilateral initiative – the Energy Transition Council (ETC) – in its 11 partner countries across Asia and Africa until at least 2025 – including Nigeria, Kenya, Egypt and Morocco. Through its technical assistance mechanism, the Rapid Response Facility (RRF), the Council will assist its partner countries to find, coordinate, and implement solutions more rapidly – including on distributed and large-scale renewables; green grids; and energy efficiency.

The UK-Kenya Strategic Partnership

The UK-Kenya strategic partnership joint statement can be found here.

ADDITIONAL INFORMATION

The COP26 Outcomes report details key achievements across the UK Presidency’s four overarching goals of mitigation, adaptation, loss and damage, finance and collaboration. Highlights from COP26 and the UK Presidency include:

Keeping 1.5 degrees alive: Over 90% of the world’s GDP, up from 30% when the UK took on the COP presidency, is now covered by net zero commitments with over 153 countries putting forward new 2030 climate plans, known as nationally determined contributions.

Increasing funding and launching UN work for dealing with climate impacts: record amounts of adaptation finance have been pledged to the Adaptation Fund and the Least Developed Country Fund under the UK Presidency. In addition at COP26, countries agreed to double 2019 levels of adaptation finance by 2025, the first quantified adaptation finance target.

Accelerating unprecedented sectoral transitions with commitments covering the energy, coal, methane, fossil fuel financing, forests and land, and transport sectors, including the first reference to coal in a cover decision agreed by 197 Parties.

https://bigger.ga/climate-finance-to-flow-to-kenya-as-uk-prime-minister-agrees-with-president-ruto-to-fast-track-kes-500-billion-of-british-investment/

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