Kenya inks deal with ATIDI to advance renewable energy projects

KENYA – The Kenyan government has taken a significant step towards advancing renewable energy initiatives by partnering with ATIDI, the African Trade Insurance Agency.

Through this agreement, the focus lies on identifying, developing, and implementing renewable energy projects across the country.

Facilitated by the Regional Liquidity Support Facility (RLSF), a credit enhancement instrument provided by ATIDI, Independent Power Producers (IPPs) in the renewable energy sector can now receive support when selling electricity generated by their projects to state-owned power utilities.

Notably, the RLSF’s scope has recently expanded to include eligible transmission projects, paving the way for potential private sector involvement in this critical sub-sector.

Under this arrangement, ATIDI will issue liquidity instruments, known as “RLSF policies,” backed by cash collateral from KfW and Norad, to IPPs or private transmission companies for up to 15 years. Each RLSF policy will cover a maximum of twelve months’ worth of project revenue.

With the RLSF Memorandum of Understanding (MoU) now in effect, ATIDI will engage with IPPs in Kenya, anticipating that advanced hydro, geothermal, solar, and wind projects will benefit from this instrument in the near future.

These projects not only capitalize on Kenya’s abundant natural resources to produce clean and sustainable energy but also strengthen the nation’s power generation and transmission capabilities.

Kenya’s significant reliance on renewable energy sources, accounting for over 80 percent of its electricity generation, positions it well to achieve its goal of transitioning to 100 percent clean energy by 2030.

The signing of the RLSF MoU serves as an additional incentive for private sector participation in realizing this objective, leveraging ATIDI’s positive credit rating from S&P and Moody’s.

During the signing event, National Treasury CS Njuguna Ndung’u underscored Kenya’s commitment to encouraging private sector involvement in financing key infrastructure projects.

He highlighted the potential of RLSF policies to facilitate project advancement while minimizing the need for government-backed credit enhancement tools.

ATIDI CEO Manuel Moses expressed optimism about the impact of the MoU on project developers, lenders, and other stakeholders interested in investing in Kenya’s energy sector.

He emphasized ATIDI’s historical involvement in Kenya’s energy projects and its ongoing support for initiatives like the Lake Turkana and Kipeto wind projects.

Energy CS Davis Chirchir emphasized the partnership’s alignment with Kenya’s long-term development agenda, Vision 2030, aimed at transforming the country into a newly-industrializing, middle-income economy.

Kenya’s accession as the tenth ATIDI member state to sign the RLSF MoU underscores its commitment to advancing renewable energy initiatives.

To date, RLSF policies have supported six renewable energy projects across various member states, facilitating significant financing and electricity generation capacity.

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