Economic geographies of large-scale renewable energies development in Kenya

Abstract

Energy transition theories and studies have made important contributions to our knowledge of the challenges and possibilities for achieving sustainable energy transition and more sustainable societies. However, this body of work can be enhanced through the incorporation of geographical perspectives and power relations as forces shaping the development and materialization of energy transition projects in practice. This thesis applies a geographic lens, as part of its analytical framework, to study the actor constellations, processes and linkages involved in the development of large-scale renewable energy (LSRE) projects in Kenya. It focuses on the key arrangements thereof, namely, financing, governance and infrastructures. The research questions of the study are answered through dedicated research contained in six chapters of the dissertation. The analysis is based on a mixed-method approach consisting of empirical fieldwork conducted in Kenya (2018-2021) as well as document and media information gathered from secondary sources. I conducted 120 expert and informal interviews, visited key field sites across Kenya (particularly in Nairobi, Nakuru and Baringo counties), and observed industry conferences and events. The findings from the fieldwork are complemented by results from the analysis relevant policy, regulatory and legal reports, and online media and archives. <br /> Large-scale renewable energy infrastructures in Kenya are mainly driven by Kenya’s Vision 2030, an ambitious plan to transform Kenya into a newly industrializing, middle-income country. The Government of Kenya identifies energy as the critical enabler for unlocking these economic growth and industrialization visions. As result, the country’s energy sector has gone through processes of neoliberal reforms, including the privatization of previously public entities, private sector participation and devolution in energy sector governance and development. These changes have allowed for the involvement and participation of multifaceted actors and stakeholders at international, national, sub-national and community levels in the country’s energy sector development. The development of large-scale renewable energy projects in Kenya is governed by rules and processes of interactions and cross-scalar linkages among these various stakeholders, broadly classified in this dissertation as investors and communities. The various investor and community groups have different strategic roles, represent different interests and have divergent and sometimes conflicting expectations. The financing for these projects comes from public finances from international and national sources, as well as private equity finance from private firms and industries. Due to the capital-intensive and high-risk features of these projects, the highest percentage of financing for the projects comes from international development financial institutions in the forms of concessional loans, grants and mezzanine, and directed towards risk mitigation and market-readiness. Climate mitigation financing in the form of specialized funds and green bonds used for blended financing and carbon offsetting also play important catalytic roles in crowding-in investors, especially at the pre-completion phases of the projects. Due to the large and influential roles of the public sector financiers and the involvement of private developers and industries, processes of financialization are so far not observed in the financing landscape of large-scale renewable energy projects in Kenya. <br /> The challenge in the development (‘future-making’) of these large-scale energy projects lies in connecting and balancing out the divergent ‘futures’ of the involved multi-actors. The divergent interests, aspirations and expectations among different investor and community groups lead to contestations and protests, which when escalated and left unmanaged can stop the progress of ‘future-making’ in this context. This is where cross-scalar consultations and negotiations among stakeholder groups become necessary. Investors are often faced with sustainability dilemmas and tensions as they attempt to simultaneously apply the sustainability triad (economic, social and environment) in LSRE projects development. Due to the complexities in managing this situation, the investors often implement these projects using a process of strategic selectivity, notwithstanding the existence of certain unresolved issues, especially regarding land and compensation. Given that most projects are pursued and advanced notwithstanding the existence of some unresolved issues (especially regarding land and compensation), national and international agencies and investors often implement Corporate Social Responsibility (CSR) infrastructure projects and activities, such as the provision of drinking water for people and their livestock in the communities, to smoothen relation with host communities. However, some of these endeavours fail to fully and sustainably address the socio-economic concerns of local communities, especially the project-affected persons (PAPs).