Benson Mwakina is the Director of Renewable energy in Kenya, and in this capacity, Mr. Mwakina oversees all of the renewable energy initiatives in Kenya which is one of the fastest growing emerging countries located in East Africa. Kenya’s electrification has been one of the success stories, improving from an 8% rate in 2000 to now 75% in 2020. In this conversation, Mr. Mwakina walks us through the government's plans to invest further in solar energy projects and how the country plans to prop up its electricity demand. I hope you enjoy my conversation with Mr. Mwakina!
Topics covered in this podcast:
[1:45] Mr. Mwakina introduces himself and speaks about background
[3:05] What are the solar development plans for the Kenyan government?
[8:15] Is the Garissa Project the only large scale, operational project presently?
[9:17] Is Kenya's sole distribution company government owned?
[9:55] Mr. Mwakina speak sabout the sanctity of PPAs to quell investor concerns
[12:16] Have the PAN African Alliances played an important role in Kenya’s energy development?
[15:20] Could the solar electricity be distributed across several African countries?
[16:58] What role does foreign investment play? How do you encourage foreign direct investment in renewable energy?
[19:00] How has Kenya been able to achieve such great success in the off-grid space?
00:06 Karan Takhar
Hello everyone. This is Karan Takhar, and welcome to the Zenergy podcast. Over the past decade, India has done an impressive job of integrating renewable energy into its energy mix. For this Fulbright podcast series, I sought to investigate the enabling factors and potential of India's global leadership in renewable energy, with the focus on solar. This Fulbright series is broken down into Four Seasons.
This season we capture the views of high-level officials of the Indian Government in energy delegates from African countries looking to India's support. We'll try and understand how India's continued progress in renewable energy development can improve its leadership position in the world.
In this episode, I'll be speaking with Benson Mwakina, the director of renewable energy in Kenya. Mr. Mwakina oversees all of the renewable energy initiatives in Kenya, which is a country with 48 million people, of which 73% currently live in the rural areas. Kenya's electrification has been one of the success stories, improving from an 8% rate in 2000 to now 75% in 2020. Let's hear from a conversation with Mr. Mwakina, who leads a renewable energy ministry in Kenya. So, I've learned that the rural Electrification authority recently launched a 55 MW project in Garissa, and Frederick was telling me that if the project does well, then more projects like this one will be developed. So, can you talk about how this project has fared in the country and also about other solar development plans presently in the pipeline?
02:14 Benson Mwakina
Yes, for your information, rural electrification has now been expanded, and their name has also been changed. It's currently a rural electrician and Renewable Energy Corporation. We have given it a bigger mandate, and it is an agency which is 100% government, so the one of the milestone projects, as you have said, is the 50 megawatts solar project in Garissa, which is doing very well currently. It is injecting about 200 MW hours daily to the National Grid, and then, of course, there are so many solar projects in Kenya as, of course, you know, Kenya is the equator passes through Kenya. So, we have some good gradients within the country. So they are, so in fact, there's so many projects in the pipeline, and they are going to over 1 gigawatt of the planned projects. However, for the projects to be commissioned or to be given a COD, then we are also supposed to match it with the demand with the current demand. So the current demand is low, and as you know that solar is intermittent, that means we also need some other sources to have a stable image mix. I don't know whether I have answered your question correctly or clearly.
03:54 Karan Takhar
No, you have. I'd like to dive a little bit deeper into this, so essentially, there are many projects in the pipeline that are almost fully developed.
04:06 Benson Mwakina
04:07 Karan Takhar
The supply exceeds the demand. So, for example, these projects are unable to create a PPA with like the distribution companies as a result of that.
04:23 Benson Mwakina
Yes, what happens is once the project has been approved for the feasibility study stage, then the negotiation of the PPA will also they it comes that it will start, but for you to be given a COD, you know, of course, construction a solar project might not need a very long time like like there are there other projects like hydro or geothermal? So, you just give us your when you now really that you need this power to be injected to the grid, yes.
05:05 Karan Takhar
So how come the demand is less than the supply? Because I know Kenya has a growing population, so I'm surprised as to the demand is less than the supply. Also, considering that there are power cuts and things like this, or in the urban areas, is the supply very strong currently?
05:30 Benson Mwakina
It is very stable. Yeah, but connecting like domestic and the mini enterprises does not really. They didn't really have a very good big demand as industrialization. So currently, the country is really aiming at industrialization, which would create that demand.
05:54 Karan Takhar
So that means these projects are just stuck in the feasibility stage. They won't be commissioned until this industrialization occurs or.
06:03 Benson Mwakina
No, no, there is what we call the least cost per development plan. OK. In that one, we know all the projects which will be commissioned up to about 2025. Those ones are already given COD. But I was telling you there is a lot of interest in the solar development projects in Kenya. So, and that's why I'm giving you a whole shopping list of about 1 gigawatt. They are those solar projects which are already under development.
06:38 Karan Takhar
OK, how many, Or what is the scale of these projects in combination, like megawatts?
06:47 Benson Mwakina
OK, we will be there.
06:47 Karan Takhar
Up to 2025, yeah. Thank you.
06:51 Benson Mwakina
After 2025, I think about 300 megawatts.
06:57 Karan Takhar
Yeah, I did see that number, actually. The 300 MW also. That is by 2025. Yeah, I was trying to find when that goal was set for it. I couldn't find the year. OK, interesting. And so presently, the Garissa project is the only one that's operational today, but then these are coming up the 300 megawatts?
07:20 Benson Mwakina
That is a big one, but we have other small projects which already connected to the page. Currently, we have been some 40 MW projects which are already under construction, Three of them, and also we have others which might start very soon.
07:37 Karan Takhar
Thank you. This has provided a lot of great clarity. So, one hesitation. I know that a lot of financial organizations in the US have, in terms of investing in a country like India, for example, and possibly also Kenya, is that when a PPA is signed, sometimes the distribution companies try and renegotiate the PPA a few years after it has been signed because the prices then go down and things like this. So, the sanctity of the PPA's is a hesitation that I know financiers in the US hub. So, I'm just curious to ask, since the distribution company is the Government owned in Kenya currently, and there's only one, so can you speak to this a little bit in terms of the sanctity of PPAs this renegotiation happened?
08:35 Benson Mwakina
One, the distribution company is not 100% government-owned. In fact, it is 51% government-owned and 49% private. It's also in the stock-stock Exchange. A PPA is normally at negotiated contract. Each party is supposed to see which clause should fit each year by every side of it, isn't it? So, in that case, when you are negotiating a PPA, you, first of all, have to understand each and every clause what the Government has done. We have a standard temp. This makes it easier to negotiate the clauses, so each clause for each PPA is different. So, you cannot just generalize. Put it as a general that this can happen, no. It will depend on what the IPP negotiated with them without ever.
09:36 Karan Takhar
So, however, has it occurred where, say, the IPP initially negotiates a very structured PPA addressing the various clauses? The distribution company then attempts to renegotiate later.
09:51 Benson Mwakina
You know I've got. No, not at the moment. I don't have an example myself. Yes.
09:56 Karan Takhar
In terms of the international and Pan-African alliances, so have you found that these have played an important role in Kenya's energy developments? Do they allow for free flow of technical knowledge and helpful collaboration across countries?
10:17 Benson Mwakina
Yes, and then what I can tell you, in the East African region, we have what we call the East African Community, and in the East African Community? In the energy sector, we have new renewable energy and energy efficiency. Then we have the power sector, and then we have the petroleum sector, so in the in the new renewable and energy efficiency sector, we have programs which they go across the all the five partner states. Now it is 6, or they start contiguous. So our plans are normally together. We have annual meetings about technical meetings are many, but then there is an annual meeting where all the energy groups meet, discuss and pass resolutions up to the ministerial level. So, there is the meeting of the Ministers for energy to pass the table we have agreed that one goes also to the power sector. Now even power sector and renewable energy will have to go hand in hand because we are talking about generation using renewable energy resources. Once we generate that power has to be transmitted, so the East African region, for example, it's having a project for the East African power pool that is East African power pool is supposed to interconnect all the countries to ensure that each country is having reliable sources and they, of course, the issue of security, the security of the system it is better way when there is a good energy mix within there, within the region to get that sensibility, so right now they are interconnectors build step to ensure that we have, we are all interconnected. When we come to the good, the African region, it is the same as African Union, we also have the energy, the energy desk, which is also coordinating the energy projects in Africa, and also there is the African power pool which is also being discussed. So, at the end of the day, we will end up connected as Africa, and of course, part of it might even go back, go outside Africa, because like Egypt, Egypt now is connected to outside Africa. So once Egypt is now in the African power pool that, that implies that we are also connected to outside Africa. Are you getting it?
13:02 Karan Takhar
Thank you. That was really nice and provided a lot of clarity. And yeah, I know I know a lot of African countries such as Ethiopia, for example, the population is growing very quickly, and I know in Ethiopia that the population is projected to increase to over 200,000,000 by 2049, so in terms of like the demand for electricity Africa, in East Africa particularly like, Rwanda I know has a big program for national electrification, and I feel like there's a lot of potentials to build solar plants for solar in these in these areas, and then potentially distribute across countries. Is that possible to build one plant that has agreements with Ethiopia and Kenya at the same time?
14:00 Benson Mwakina
Yes, then they, as I told you, then East African Community, it's OK. It's not invasive capability, but within based on African community where those plants which are funded by donors, and some of them are being shared by different countries. So all those all those programs are there like Tanzania, and, and, and, Rwanda, we because they share some rivers. So if they, It's a hydro project. Then they, there must be an agreement bilaterally between the two countries and also with their with the finance.
14:40 Karan Takhar
I see. Yeah. Thank you. And what role does foreign investment play in Kenya's renewable developments, and how do you encourage foreign direct investments in renewables within Kenya?
14:54 Benson Mwakina
In fact, the FDI plays a major role because most of these projects are capital expenses. You know, when I do an energy project, it has a lot of its capital intensive, so most financiers are not local. Also, the technologies they issue the technology all the technologies more foreign, so in Kenya, for example, and most of these are practical, we are going through this philter for limited in tariff projects. We are also going through PPP, and all those are through the IPPs. Just IPPS would be the generation currently in most of these projects are a measurement. You are developed by IPPS, so we have to ensure that they are properly Kitten 4 in areas. Like in Kenya, we have the duty exemption for the generation of renewable energy projects. So, when you are coming to do, and generation is in local emerging your your your favor with the with you to duty exemption. So that is that is an incentive, and also we will also give a little support to cover as a number of risks which might a checklist in the general project, so it is properly covered, and of course, we are talking of the policy framework for issuance of garment supernatural told you, and then now I also told you that this is the standard letter of support, which is, which a template is there. So, it's a matter of just negotiating the two clauses which are there to speed the process.
16:44 Karan Takhar
Recently I also interviewed the Managing director of Dlights, and they have a huge presence in Kenya, and I was reading online one in three of the off-grid households within Kenya itself has a Dlight product, so I've also, as I was doing research on the company, I was also doing a lot of research on the Kenya off-grid space, and out of most of the countries I've seen, Kenya has just done in keeping lead in terms of getting access to the rural areas going from 8% in 2,000 to now at the very least 75% and probably more. So, I'm just curious as to hear your thoughts on how Kenya has been able to achieve such great success in this specific.
17:45 Benson Mwakina
Yeah, I think what you should know is that as I started in my opening remarks, Kenya wants to avail affordable, competitive, and quality energy for all Kenyans, and so energy being the, we can talk a bit as an enabler in every sector. Every of economy requires image, so when can you discover that then a number of programs are put in place to ensure that each and every person gets that affordable and quality image in Kenya, and they have all these resources? As I mentioned earlier, we have very diverse clean energy resources in Kenya. I should have mentioned to you that the more in our energy mix, about 85 to 88% is from clean sources, so it is about 85% clean energy from renewable energy sources, and this one has as has become it has interested so many players in the energy sector across the globe, so you find another or not there are investors coming to Kenya from all over the world just because of those renewable energy resources to ensure that we capitalize on that so when other countries are talking of 30% energy mix from renewable Kenya is already beyond 85 you see now that Kenya has also now put in place clients to ensure that there is this universal access by the year 2022 and to achieve that the program that have been put into place, we have the major one called the last mile connectivity, the last mile connectivity, we want to extend the grids to areas which we which economical to extend the grid because there are many areas which will become economical to extend the grid. But yeah, we have, like, the high voltage lines. Then we can install transformers and then distribute to those people there. We only have Transformers, and they're not fully utilized. We ensure that we connect all those people who are who are around there. That's what has really moved us very fast, and then we started also putting together they off-grid solutions, so off-grid solutions. We've had enough programs from the private sector from the government agencies, including the renewal extension at reliably Merge Corporation direct, period the one we are calling rather is that that name is no longer there, so we have a number of mini-grids which have been developed some ordered in place and then we are now also going for their home systems, and all these are using the global energy. So, when we go to standard-alone systems, we are talking of solar. When we talk to about mini-grids, we are talking about solar and sometimes a bit of wind in the in the mini-grids, and then we are also encouraging it in the portable, portable systems to ensure that on that, yeah, maybe mentioning the Dlight, they those are some of the products they are also, they are also. They're not the only ones. Their many delight is just one of them. So, they are they are the people who are now marketing these, especially their home systems, the stand-alone systems, and the portable systems.
21:40 Karan Takhar
In terms of the renewable energy policy and plans, specifically with respect to solar, I'm curious to ask about so by 2025. There are current plans and also currents letters of interest signed, and PPA forms with project developers and pipes for 300 megawatts of capacity by 2025. Those are already in the list, and then but then.
22:10 Benson Mwakina
22:13 Karan Takhar
More generally there's there's the demand to create projects worth 1 gigawatt, like there are enough developers out there who want to create more projects, up to one gigawatt at the very least, but the Kenyan Government is unwilling to create contracts or letters of interest with those remaining developers because the demand for electricity is not there. Is that the case?
22:43 Benson Mwakina
That's the case. Yes, but we still, we still expect that the demand will be there because when we are talking of industrialization, we have a whole ministry in charge of industrialization. So, they know that we are depending on them to create this opportunity for further demand. So, they are also working day in, day out, just the same way we are saying we are ready to supply this one GW. Please can you ensure that you are also planning for that to be utilized? Are you getting it? Yeah, because all the resources in Kenya have been mapped. So, we have solar resources. They have all been mapped. We have a map. We have wind resources. They've been much. We have the hydros, the mini-high trolls, and the small Hydro. All the rivers have been locked. So, for us, it's once the demand is there, then creating and supplying it will be a very simple thing.
23:50 Karan Takhar
This makes sense, and the demand will largely be created through industrialization, as you mentioned.
23:56 Benson Mwakina
And also, FDIs because we are also, we are also encouraging the FDIs because we need big, big factories. We need big industries.
24:06 Karan Takhar
To invest in these industrial projects. Exactly, exactly. Thank you. So in your mind, are you very optimistic about Kenya's renewable energy and, specifically, solar future?
24:20 Benson Mwakina
I am because this is the this is the thing. This is the future because in solar, it may be a cut. I could also add something. We are now. Yeah, we have a new policy on energy policy, and one of the areas which should interest so many people is the net metering, and the distributed data generation would want anybody who could just pick some partners above the building, where it is not beyond one megawatt, you can have the net material. So that you use what you need, and then you pass for whatever you need much need at the end of the month. Then you just balance how much debated, how much debate, then cheque, and then you get a paycheck at the end of the month. So that one alone will ensure that there there is a lot of interest even in the manufacturing of the panels. We have people have given who are interested in starting the manufacturing of solar cells in Kenya, and we're encouraging them to do that because the industry is bad.
25:38 Karan Takhar
Thank you so much. Thank you so much for your time, Mr. Mwakina. I hope you enjoyed that episode and do check out the show notes For more information on my guest. See you next time.