Using Public Finance to Attract Private Investment in Geothermal: Olkaria III Case Study
Climate Policy Initiative
Download
Abstract: Geothermal energy holds significant promise for the low-carbon energy systems of developing countries. As a renewable electricity source with the ability to both meet baseload power demand and backstop fluctuating supply from other renewable sources, it can be a vital component of low carbon electricity systems – where resources allow. Kenya is one of the leading countries globally for geothermal development, with significant geothermal resources and a government already undertaking significant investment, including supporting scientific research, drilling and the generation of electricity. The Government of Kenya recognizes the importance of geothermal as cost-effective option for reducing the country’s reliance on expensive fossil fuel and weather-dependent hydro power generation as well as improving energy access. As a consequence, it has set the ambitious target of increasing its geothermal power capacity from 600 MW to 5,000 MW by 2030, taking the share of geothermal in the power mix from 15% to 27%. The Kenyan government is seeking to accelerate geothermal development to meet ambitious deployment targets through a series of reforms.