NAIROBI, March 1 (Xinhua) -- Kenya and the African Trade and Investment Development Insurance (ATIDI), a risk-mitigation institution of African countries, on Friday signed a memorandum of understanding on jointly identifying, developing and implementing renewable energy projects across Kenya.
Under the agreement, independent power producers in Kenya who sell their electricity to state-owned power utilities will receive financial guarantees, said Manuel Moses, chief executive officer of ATIDI.
"These guarantees will send out a positive message to project developers, lenders and other prospective stakeholders looking to invest in Kenya's energy sector," Moses said in a statement released in Nairobi, the capital of Kenya.
According to the Energy and Petroleum Regulatory Authority, Kenya has an installed electricity capacity of about 3,000 MW, with 86 percent coming from renewable sources.
The ATIDI will issue insurance policies backed by cash collateral to independent power producers or private transmission companies for a maximum tenure of up to 15 years, Moses said.
With the agreement in place, he said, the ATIDI will engage with independent power producers in Kenya with the expectation that additional hydro, geothermal, solar, and wind projects will be implemented.
Davis Chirchir, cabinet secretary of the Ministry of Energy and Petroleum, said the collaboration between the ATIDI and Kenya will boost the supply of renewable energy in the country by protecting independent power producers against the risk of delayed payments by state-owned utilities.
Njuguna Ndung'u, cabinet secretary of the National Treasury, said Kenya is keen to encourage private sector participation in the development of renewable energy power plants and transmission infrastructure.
He said the agreement is expected to enable more green energy projects to advance while reducing the need for government-backed credit enhancement tools.
