The African Development Bank (AfDB)-managed Sustainable Energy Fund for Africa (SEFA) approved a
US $992,000-grant to support the preparation of 7.8-MW hydropower project (HPP) in Kenya.
The project is based on standard run-of-the-river technology, but features an innovative community ownership structure,
where financial returns will also accrue to members of the Mutunguru community in Central Kenya, mainly due to
a shareholding structure where communities actually receive a fixed small share of the project’s profits.
“This additional financial benefit is expected to translate into significant economic and developmental impacts
in the project area, particularly in terms of socio-economic empowerment and job creation.
This significant community ownership and support makes it deserving of the SEFA intervention as a model to be
considered in future Bank operations,”
SEFA support is instrumental in delivering a bankable project under such unique arrangement by providing:
The AfDB’s Africa Climate Technology Centre (ACTC) will also contribute to the institutional and management capacity building for the community.
This project will contribute to Government of Kenya objectives of expanding on-grid generation capacity,
in particular through harnessing indigenous renewable capacity.
Patrick Kimathi of the Mutunguru Hydroelectric Company Limited affirmed:
Mutunguru HPP will generate new income especially for women out of revenues from a renewable energy
infrastructure project increasing of 115% the farmers’ revenue.
It will also enhance job skills of rural women as they take on additional micro-economical
activities besides the ones they are already dominating:
The project is fully aligned with the AfDB’s strategic goal to support inclusive
and green growth by promoting access to clean, modern, reliable and affordable energy
services in rural areas;
Finally, it is also aligned with the priorities of the AfDB’s Country Strategy Paper 2014-2018 for Kenya.
stated Gabriel Negatu, AfDB’s Director-General for East Africa Regional Development and Business Delivery Office.
(i) legal support for setting up appropriate community arrangements;
(ii) financial advisory; (iii)
support to lenders’ due diligence; (iv)
support to environmental and social impact assessment;
and (v) institutional and management capacity building.
“The Government of Kenya considers small hydro a top priority given the wide resource availability,
baseload properties and ease of integration into the grid.
Through building capacity of local communities to own and manage
commercially viable grid-connected small hydropower projects, we support implementation of the Feed in Tariff Policy in Kenya
to increase access to clean, affordable and sustainable energy.”
tea plantations and dairy farms.
and is well aligned with the Energy Policy as well as the strategy for the New Deal on Energy,
by promoting energy access and renewable energy technologies.