Pricewaterhouse Coopers (PwC) said that in order for Kenya to accrue more investors to its renewable energy sector, the government must subsidize the industry. Although Kenya has at least 3,000 MW of proven geothermal energy in its Great Rift Valley, it exploits only about 200 MW, analysts estimate.
"The message respondents are saying is that going to renewable energy without government subsidies is not competitive," Kuria Muchiru, a senior partner at PwC in Kenya, told reporters at the launch of a global survey of 65 power companies.
Muchiru said that the global crisis had caused traditional sources of funding to shrink, but that sovereign funds from Asia and the Middle East were now more active."Sovereign funds are the only ones investing, but the hedge funds, private equity and pension funds are not there," he said. "You are chasing fewer investors who have more choice."
Only a few Kenyan companies have ventured into green energy. Ormat Technologies generates about 50 MW of geothermal power in the Rift Valley and Mumias Sugar produces 26 MW made from a byproduct of sugar production. Only KenGen has so far invested substantially in the exploration and exploitation of renewable resources.