Financing large-scale renewable-energy projects in Kenya: investor types, international connections, and financialization

Abstract

ABSTRACTAs energy transitions are progressing and economies of scale are kicking in, renewable-electricity generation begins to include, and be dominated by, large-scale operations. This shift is accompanied by far-reaching changes in the ownership and financing structures of renewable-energy projects, involving connections and (inter)dependencies between international and domestic investors and policies. With growing sizes and maturity, renewable-energy projects are also increasingly taken to capital markets and have become subject to financialization. Until recently these processes have only been observed in the Global North but not in the Global South. So far there has been little research on renewable-energy financialization in the Global South, especially in Sub-Saharan Africa. In our paper we address this gap by exploring the international connections and (possible) financialization of two large-scale renewable-energy projects in Kenya. Based on case-study analyses of geothermal and wind projects in Kenya, we argue that due to their complex risk structure, public investment and support, both from domestic sources and development finance institutions (DFIs), are and will remain key to facilitate or even enable such projects. In contrast to Baker’s (2015) case study on South Africa, we neither see nor expect financialization of large-scale renewable-energy projects in Kenya and most other Sub-Saharan African countries any time soon.