Kenya has allocated $93 million (Sh9.3 billion) for development of geothermal energy in the 2020/21 financial year starting next month.
Treasury minister Ukur Yatani announced the allocation in his budget statement on Thursday.
Kenya, with an installed geothermal capacity of 823MW, is ranked seventh-largest geothermal power producer in the world and takes the pole position in Africa.
The East African country’s stock of geothermal has expanded four times in the last decade.
Geothermal is an attractive low-cost renewable energy source with low emissions and serves as stable, reliable base-load electricity.
Kenya is among a handful of nations worldwide generating and consuming electricity almost completely from renewable sources. Last month, electricity generated from green sources stood at 95 percent, comprising geothermal, hydropower, wind and solar.
The shift towards clean sources is part of Kenya’s green development agenda which is aligned to global climate change mitigation goals.
Kenya, like the rest of the world has in recent years experienced increased frequency and intensity of extreme weather conditions, most recently deadly floods.
“In order to minimise the adverse effects of this phenomenon on the economy, we need to pursue a green economic development path. In this regard, the National Treasury proposes to tap into the Green Climate Financing by issuing the first “Sovereign Green Bond” to finance major infrastructure projects in the financial year 2020/21. These proceeds will be directed towards green projects at both the national and county level,” said CS Yatani in his budget statement.
Geothermal Development Company (GDC), a government-owned agency, is mandated to drill exploration wells in search of steam on behalf of investors to derisk the venture before handing them over to power producers who pay for the steam that they convert to electricity.
Power producer KenGen, another State-owned entity, is in the driver’s seat in constructing geothermal power plants in Kenya’s Rift Valley steam fields.
At the same time, the National Treasury has allocated $5.4 million (Sh540 million) for tree planning across the country using locally-sourced seedlings in efforts to enhance tree cover.
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