The analysis is based on a literature review, project documents, interviews and a technical workshop in Nairobi with developers, financiers, utilities and government agencies. Kenya is selected for a deep dive due to its comparatively large renewable energy sector and because it illustrates the challenges that emerge after a period of rapid deployment. The report identifies how the various risk mitigation approaches work in practice and how they can be adapted or replicated across a region in which solar or wind projects are now either operating or in advanced development in every country.

Renewable energy investment in East Africa has grown despite macroeconomic challenges, limited access to foreign currency and rising public debt. However, electricity markets remain small and utilities face financial strain, while projects encounter political uncertainty, challenges to land-access and grid constraints. In this context, risk mitigation and transfer instruments play a central role in moving projects from development to financial close. Such instruments range from comprehensive programs like Scaling Solar or GET FiT that combine different forms of support with transparent procurement and strong backing from institutions, to project-level technical assistance, grants, concessional funding and guarantees, that help provide investors with the reassurance they need to make an investment decision.

The case studies show how mitigation strategies vary by national context. Burundi’s first solar independent power producer emerged largely due to strong development finance institutions and insurance support. Djibouti’s Red Sea Power project progressed through an all-equity model backed by political risk insurance. The GET FiT Uganda Program demonstrated that transparent tenders and strong institutional involvement can lower risks and propel projects online in a relatively short period of time, though not without challenges. The case of the regional leader Kenya shows that spearheading several projects with significant private sector involvement is possible, but also that no country is immune to macroeconomic pressures, delays in transmission or offtaker challenges, all of which ultimately affect investor confidence.

Across all cases, risks remain high even as experience in the region grows. Successful projects combine financial guarantees, insurance and other forms of support with conditions that strengthen utilities and improve planning. Emerging risk mitigation tools show promise, but their effectiveness depends on alignment with national priorities and capacity. Ultimately, improvements in governance and utility performance are the systematic changes needed to, over time, reduce the need for risk mitigation and transfer.