Project financing key to achieving full transition to renewable energy

Ronald Ouma displays the briquettes made at Kericho Renewable Energy centre using discarded charcoal waste. In November 2022, history was made as Africa hosted the COP27 forum at Sharm El Sheikh in Egypt. To many, Africa was just a venue for the biggest global summit on climate action more like what the Arab nation Qatar was to the FIFA World Cup. However, to those in the know, there was more than meets the eye at the COP27. Firstly, unlike Qatar which went down in history as the first host to lose all three group games and was quickly relegated to the fans section in their own turf, Africa has something going post-COP27 and Kenya is leading this new path for the continent. Indeed, as we usher in the New Year, this is the time for all patriots to rally around the institutions, individuals, and communities behind this campaign aimed at leaving a better planet for future generations. One of the key outcomes of the convention came in the form of a global recognition that climate change is to blame for the prevalent energy and food crises in developing countries. COP27 recognised the urgent need for parties to reduce global greenhouse gas emissions in all sectors, including through increased use of low-emission energy but with a renewed preference for clean energy. Even as we transition to renewable energy, the reality in Africa is that nearly 600 million people do not have access to basic electricity for domestic or commercial use with about 80 per cent lacking access to clean cooking technologies. To fully industrialise, improve health and education standards, and reduce poverty, Africans must access safe, affordable and dependable energy. For this to happen, we need must deliberate more on future funding commitments. Financial commitments According to the International Energy Agency (IEA)'s World Energy Outlook (WEO) 2022, about Sh490 trillion per year needs to be invested in renewable energy globally up until 2030 to reach net zero emissions by 2050. The big challenge, therefore, is financing the renewable energy journey, as a prerequisite. The cost is high, but the benefits far outweigh the investments. Financing new and emerging renewable energy technologies is key towards a clean energy transition. Financial commitments are however yet to be honoured including the goal of developed country parties to mobilise jointly USD 100 billion per year by 2020 in the context of meaningful mitigation action and transparency on implementation. This, therefore, raises a key concern, especially for developing countries already experiencing negative impacts of climate change. This raises the question: "Who needs to act?" Kenya has made considerable efforts towards climate mitigation and adaptation in the energy sector leveraging its competitive advantages in renewables to accelerate the shift to a low-carbon economy. Currently, renewable energy accounts for more than 90 per cent of the energy consumed in Kenya, up from less than 60 per cent a decade ago thanks to the strides made in deployment of renewable energy. This composition of renewable energy in the national grid reduces annual emissions by approximately seven million tons of carbon dioxide equivalent - strengthening our commitment to climate action. Energy, climate change and people are inextricably linked, as is the critical role of achieving the 2030 Agenda for Sustainable Development and the Paris Agreement on Climate Change. Kenya is cognizant of this and through the country's Nationally Determined Contribution (NDC) has made deliberate efforts to abate its Greenhouse gas (GHG) emissions by 32 per cent by 2030 relative to the Business-as-Usual scenario (BAU) scenario of 143 MtCO2eq (Carbon dioxide equivalent) including in the energy sector. This is in line with Kenya's sustainable development agenda and national circumstances. This situation will get worse as demonstrated by ongoing global energy crisis which has highlighted need to make energy systems secure, reliable and resilient by accelerating clean and just transition to renewable energy. To change this path, Kenya has developed a draft Long Term Low Emission Development Strategy that forecasts that the country can be a net zero emitter by 2050 if the electricity system is fully decarbonised and energy consumption in industry and transport shifts from traditional carbon-based fuels to clean sources including hydrogen fuel. During COP26, Kenya committed to transition to 100 per cent renewable by 2030 through the Glasgow Breakthrough Agenda on Power which aims to make clean power affordable and reliable option for all countries by 2030.This makes Kenya a global leader in promotion of renewable energy and a leader in achieving climate change goals and carbon-neutral development pathways. Post-COP27, business and environmental leaders in Africa should drive the conversation on geothermal resources as a reliable and clean energy option. This will be the ultimate sustainable approach towards meeting both Africa's existing and growing energy demand and being kind to the environment. In Africa and more so in the Eastern and Central African regions, geothermal energy is the future. This resource will complement Africa's energy systems that have relied on hydroelectricity which accounts for about 17 per cent of the total installed power in the continent. Africa stands to win big if it embraces geothermal considering the increasing climate hazards that are already posing a challenge to hydropower generation. As a continent, we should share expertise and skills to accelerate clean energy innovation deployment more so in geothermal development to bridge the energy gap.

Project financing key to achieving full transition to renewable energy

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