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Stakeholders’ perspectives on the effectiveness of the feed-in tariff and renewable energy auction policies in Kenya

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SEI report

Stakeholders’ perspectives on the effectiveness of the feed-in tariff and renewable energy auction policies in Kenya

This report discusses the key barriers and enablers in the design and implementation of policies for feed-in tariffs (FIT) and renewable electricity auctions (REA) in Kenya. It draws on empirical evidence and secondary data to provide recommendations for the effective development and deployment of REA and other emerging policy instruments to support renewable energy deployment.

Anderson Kehbila, Ann Kingiri, Moses Kirimi, Mbeo Ogeya, Josephat Okemwa, Cynthia Sitati, Yvonne Gitu, Lawrence Nzuve, Philip Osano / Published on 23 December 2024

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Citation

Kehbila, A., Kingiri, A., Kirimi, M., Ogeya, M., Okemwa, J., Sitati, C., Gitu, Y., Nzuve, L., & Osano, P. (2024). Stakeholders’ perspectives on the effectiveness of the feed-in tariff and renewable energy auction policies in Kenya. SEI report. Stockholm Environment Institute. https://doi.org/10.51414/sei2024.053

Key messages

  • Strategic communication and stakeholder engagement, particularly academic and research institutions, community-based organizations and local institutions, is essential for the effective formulation and implementation of Kenya’s Feed-in Tariff (FIT) and Renewable Energy Auction (REA) policies.

  • Kenya’s REA ambitions would benefit from the establishment of a robust financing and de-risking mechanism, comprising incentives such as tax credits, guarantees and reduced import tariffs on renewable energy technologies to attract private sector investments.

  • With the right institutions and incentives as well as a transparent REA bidding process, Kenya could potentially achieve its goal of 100% electricity generation from renewable energy sources by 2030.

  • Leveraging development finance to fund high-risk, high-impact renewable energy projects that deliver development results while rendering them bankable and reducing the investment risks for private capital is critical in ultimately making renewable energy investments financially viable and attractive.

The Kenyan government has introduced a series of policy reforms and formulated several strategic planning documents to advance the development and expansion of the renewable energy sector. FIT and REA are part of these policy instruments aimed at facilitating the expansion of renewable energy in Kenya’s power grid.

Overall, the study findings highlight key barriers and opportunities associated with the deployment of Kenya’s FIT policy, which is more advanced in terms of implementation compared to its nascent REA policy. The authors make recommendations for how these barriers might be overcome for the FIT policy while leveraging on the opportunities to inform the implementation of the recently enacted REA policy. These recommendations speak to actors in both the policy and private sectors.

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SEI authors

Anderson Kehbila

Senior Research Fellow/Research Director for Africa

SEI Africa

Moses Kirimi

Research Associate

SEI Africa

Cynthia Sitati
Cynthia Sitati

Research Associate

SEI Africa

Topics and subtopics
Governance : Public policy / Energy : Renewables
Related centres
SEI Africa
Regions
Kenya