Since U.S. President Donald Trump dismantled the United States Agency for International Development (USAID), renewable energy projects in Kenya have been put on hold—a significant shift for a country that relies heavily on renewable energy.
Over the past twenty years, Kenya’s power sector has grown steadily as the result of an intensive electrification effort. Between 2013 and 2014, its power accessibility rate for all citizens increased from 32 percent to 84 percent. By 2030, the nation—which is one of the world’s least expensive geothermal power producers—had hoped to achieve universal access to electricity, with a major emphasis on increasing access in rural areas.
Before Trump’s decision to freeze most of USAID’s funding in February, Kenya had received increasing support from international groups such as the Climate Investment Funds, which endorsed a $70 million plan last year with an initial allocation of $46.39 million to advance renewable energy in Kenya. But the U.S. President’s recent orders to end the disbursement of clean energy-related funds could jeopardize ongoing renewable energy projects in Kenya and across the African continent.
In 2023, Kenya was listed among the countries set to receive $88.9 million from USAID to fund renewable energy projects, in addition to $4.7 billion in public and private investments in renewable energy. These funds were mobilized through Power Africa, a U.S.-led partnership that combines resources from more than 200 public and private sector partners in order to increase access to electricity in sub-Saharan Africa. The United States has made its most significant recent contributions to energy access in Africa through Power Africa and the Development Finance Corporation. But both initiatives have been adversely affected by cuts to USAID, and Power Africa has been unable to deliver the money earmarked for Kenyan energy projects.
While these initiatives had helped Kenya accelerate its renewable energy agenda—Power Africa had sought to fund 60 million connections and at least 30,000 megawatts (MW) of greener, more dependable energy-production capacity by 2030—the withdrawal of this funding may lead to a significant slowdown in the country’s climate action plans.
East Africa has abundant renewable energy resources, including solar power, hydropower, geothermal power, and wind power.
Kenya, however, is a regional leader in renewable energy production, with renewable resources accounting for nearly 90 percent of its installed energy. The country is the home of some of the largest energy stations in Africa, including a 310 MW wind farm in Turkana, a 500 MW geothermal plant in the Great Rift Valley, and the 55 MW Garissa Solar Park. Last year, Kenya’s Ministry of Energy directed all new firms aiming to set up wind and solar power plants to include battery energy storage systems to support the grid during peak demand.
Jackson Raini, a green energy expert at an agricultural supply company called Flamingo, says there is an important lesson for Kenya to take from the USAID freeze. “Kenya as a country must set up its own funding structure—stop depending on donors, especially for this transition to renewable energy,” he tells The Progressive.
According to Raini, Kenya’s energy sector has been largely dependent on foreign support, either through conditional and unconditional grants or loans, and should instead prioritize funding renewable energy projects through the country’s own budget.
Kenya’s current installed hydropower capacity is around 800 MW, a considerable portion of the nationwide potential capacity of 3,321 MW. It is important for Kenya to transition into a more diverse mix of renewable energy sources because hydropower is vulnerable to floods and drought. Considering the acute effects of climate change witnessed across the world, hydropower is slowly becoming a less reliable source of power.
Raini says the country will still eventually complete a 100 percent transition to renewable energy, although it may not be able to meet its 2030 goal if the USAID funding freeze continues.
He points out that while USAID was an important partner in Kenya’s energy transition, other partners in the sector are still in a position to help Kenya complete the project, including the Japan International Cooperation Agency, the Africa Development Bank Group, and the Export-Import Bank of China. Kenya’s geothermal energy potential makes it an attractive candidate for renewable energy investors—the country’s Rift Valley, where its main geothermal station is located, has a 10,000 MW energy potential. In the next two or three years, geothermal power alone is expected to produce 135 MW of power, or about 4 percent of Kenya’s total installed electricity capacity.
But as a result of the USAID funding freeze, the country will likely see reduced grid infrastructure construction due to lower investments in the transition network and power regulation, modernization of the grid, and power storage. Should Kenya prove unable to keep its local energy production up to the level of consumption, it may need to additionally tap into regional energy supply from the Gibe III Dam and the Grand Ethiopian Renaissance Dam.
Kenya has made strides on its grid flexibility, growing its capacity through the mixing of a variety of renewables, and expanding its energy matrix (mixing various renewable and nonrenewable energy sources to meet energy demands), as it nears the last stretch of reducing the 10 percent deficit in reaching the goal of full renewable energy.
Realizing this goal will not be without difficulties, such as matching the supply of renewable energy with the ever-growing demand for energy. Even though the Kenya Energy Transition and Investment Plan seeks to draw in investment, raising money remains the main hurdle.
“This is a reminder that, as a country, we must prioritize critical projects if we are
to absorb shocks from donor freezing,” Raini says.