Kenya to receive $184m support for its green transition

The UK government and the Kenya government through the TheCityUK and the Nairobi International Financial Center Authority respectively have signed an MoU, establishing a formal partnership, including deeper collaboration with the London Stock Exchange.

This was made during Kenyan President Uhuru Kenyatta’s three-day working visit to London on July 27, 2021.

There, the UK government announced a series of green investments in Kenya, totalling £132 million (approximately $184m). The investments are to support Kenya’s green transition efforts.

The country‘s plan for green transition includes the construction of eco-friendly housing, funding for electric mobility and rural electrification via green mini-grids. Here’s a breakdown of the investments and what the funds will be channelled into.

Green housing, smart city

A new $81 million fund, anchored by £35 million of UK Government investment will be allocated to build 10,000 environmentally responsible and affordable homes in Kenya.

The funding will drive the Kenyan government’s policy of developing sustainable cities, which in recent years has resulted in a number of major housing projects, including Mwale Medical and Technology City (MMTC).

The green city, MMTC, which is located in Butere sub-county, Kakamega, will have additional 4 800 affordable, eco-friendly mid-rise homes built in it.

Also in the new town, a 5 000-bed referral hospital, airport and what will be one of Kenya’s largest shopping malls will be built there. The smart city will be powered by a 144 MWp solar photovoltaic plant.

Driving electric mobility in Kenya

The funding will also accelerate the development of electric mobility in Kenya with a $6.2 million investment by UK company, ARC Ride, to grow their fleet of electric vehicles in Kenya. Through its subsidiary, ARC Ride Kenya, the company aims to offer transport by tricycle, commonly known as “tuk-tuks”.

Unlike fossil-fueled cars that contribute to carbon emission, the tuk-tuks proposed by ARC Ride Kenya will be less polluting due to their electric motors.

The UK government also announced a $1.25 million investment in Nopia Ride, an electric taxi service that has been available in the capital Nairobi for some years. The funding is being provided through InfraCo Africa, a Private Infrastructure Development Group (PIDG) company.

Powering rural areas with renewable energy

A $4.6 million investment from UK-backed InfraCo Africa will be used to finance the expansion of solar mini-grids in Western Kenya, allowing 6,000 rural households to access clean energy.

In the same vein, the UK government is announcing $5.15 million to support renewable energy, clean cooling and forest restoration projects, including the Kaptagat Forest, located about 25 kilometres east of Eldoret in the Rift Valley.

Strengthening Kenya’s investment appeal

In a bid to structure Kenyan infrastructure projects so they are able to attract private investment, $1.4 million of UK aid funding will be used for technical support.

In addition, $25 million of UK grant funding for a digital customs system will help to facilitate Kenya’s international trade, further allowing companies to take greater advantage of the UK-Kenya trade deal ratified in early 2021.

With the investments, the UK has supported the set-up, business case development and investor proposition of the Nairobi International Financial Centre through Financial Sector Deepening.