Is Kenya on track to follow an electrification strategy that is green and pro-poor? What are the main challenges to following this path? The two questions guiding this study are particularly relevant in a country with exceptional renewable energy resources, but where 80 per cent of the population lacks access to electricity and 50 per cent lives in poverty.
This study looks at four particular issues relating to access to green electricity for the poor: accessibility; commercial viability for project developers; financial sustainability for the State; and affordability. We will focus on grid electricity and mini-grids. For grid-connected generation, once electricity is fed to the grid, the issues of accessibility and affordability for the poor depend on national policies determining who gets electricity and at what price, making it impossible to differentiate between green and non-green electricity.
However, our study will show whether or not on-grid renewable generation can be financially sustainable in Kenya while providing affordable fees. For off-grid electricity, targeting the poor is a matter of situating generation capacity in the right places and affordability is a matter of setting prices that allow for cost recovery without being excessively expensive for the poor.
This report can support decision-making for development and climate finance institutions, as well as private investors in Kenya seeking a pro-poor green electrification strategy. It shows how to target the poor, which electrification alternatives to use, at what price, whether or not this is commercially viable and which policies would be required to make it so.