Encourage production of clean energy

By Isaac Kalua
[email protected]

“Providing sustainable energy for all could be the biggest opportunity of the 21st century. Sustainable energy is the golden thread that connects economic growth, social equity and a climate and environment that enables the world to thrive.” These were the words of UN Secretary General Ban Ki Moon in September 2012. 

Indeed, sustainable energy is the driver of economic growth. It is therefore important to grant ordinary investors space in the driver’s seat so that they can play a part in driving economic growth. This can be done by empowering them to be producers and sellers of clean energy through what is known as Feed-in Tariff.  

Feed-in tariff is a renewable energy policy that encourages investment in renewable energy generation by guaranteeing to buy and pay for all the electricity produced. Kenya already has a rather commendable Feed-in-Tariff policy.  Globally, several countries have been utilising similar policies for years. Just last month in March, Australia announced that it would grant 20-year Feed-in tariff entitlements for up to 200MW of wind generation capacity. This is a very big deal that will incentivise investors and empower communities with more energy.

Private sector investors in Kenya should follow suit and step up investments that will energise Kenya especially in the rural areas. The essence and vibrancy of business lies in being able to sell your product or service. Since Feed-in-Tariff guarantees to buy a given amount of energy for a given period of time, it would be foolhardy not to take advantage of this business opportunity.

All investments need financing to be actualised. Financing is the oxygen that breathes life into an investment idea. Financial institutions need to finance renewable energy investors in the same manner that Africa Development Bank did last month when it signed a mega financing deal with the Lake Turkana Wind Power Project Consortium. This unprecedented financing will play a big part in birthing Africa’s largest wind farm.

The government can also explore innovative tax revenues that will finance renewable energy production for Feed-in-Tariffs. Algeria and Mauritius are already taxing fossil fuels to fund renewable energy. On a global level, financing mechanisms like the Green Climate Fund must play a more prominent role in financing Feed-in-Tariffs in Africa to take off and remain rooted.

Well financed, legislatively anchored and professionally executed Feed-in-Tariffs will go a long way in helping Kenya and Africa as a whole to meet the energy needs that will power sustainable development. 

Think green, Act green!