The Climate Catalyst Fund (CCF) has received US$75mn that will be invested in clean energy projects in East Africa and other emerging markets
The CCF, which is managed by the International finance Corporation, is expected to release new funding for renewable projects across East Africa that include geothermal, wind and solar power.
The funds will also be invested in energy efficiency, water, agriculture and forestry.
Climate Catalyst Fund invests in global private equity funds focused on low carbon and climate friendly companies and projects in the emerging markets.
Other private equity funds in the continent have also been putting their money in the energy sector.
“Better renewable energy policies like feed-in tariffs in Kenya are also attracting investors in renewable energy projects,” said Solomon Asamoah, chief investment of the African Finance Corporation.
South African based, NextEnergy Capital, is currently involved in raising US$500mn for private equity fund, ix:Africa, which will be invested in renewable energy.
Studies have showed that the East African Community states; Uganda, Kenya, Tanzania, Rwanda and Burundi, are facing power shortages due to climate change.
As these economies grow, increased power demand has also pressurized nations to increase investment in sustainable and renewable sources of energy.
Private investors, donors and grants have financed EA states in developing power generation capacity.
In Uganda, at the current economic growth rate of 7 per cent, domestic power demand is expected to increase from 370MW to 1,130MW in 2023.
Tanzania has currently experienced an economic upturn, which has led to rising demand for electricity due to mining and industrial activities, especially in the west and south of the country.
Kenya has been on the forefront in developing geothermal power from a number of sites in the Rift Valley. It is expected that the national grid will have a total of 3,189 MW by 2018 from the current 1,600 MW. Most of this additional power is expected to come from geothermal, wind and hydropower sources.
An expansion project for a 280 MW geothermal project with an extra 140 MW at Olkaria I and a new Olkaria IV project are currently underway to boost production.
Mwangi Mumero
