Time flies with great content! Renew in to keep enjoying all our premium content.
Prime
KenGen seeks buyer for extra 1.8m carbon credits
Kenya Electricity Generating Company (KenGen) workers walk at the Olkaria II Geothermal power plant near the Rift Valley town of Naivasha, Kenya on February 15, 2018. KenGen is keen to maximise on the carbon credits from its vast generation of clean energy.
KenGen is set to sell an additional 1.8 million Certified Emission Reductions (CERs) as the firm continues to reap from the new revenue stream that is tied to its clean energy plants.
The State-owned firm has floated a tender for sale of the CERs from three of its plants nearly a year after it got a buyer for 4.62 million carbon credits at $32.05 million (Sh4.14 billion at prevailing exchange rates).
Carbon credits are permits that allow the owner to emit a certain amount of carbon dioxide or other greenhouse gases, with the units purchased from owners of forests or other environmentally friendly assets.
“KenGen is therefore offering 1,806,250 CERs as detailed above for sale with the possibility to include additional CERs when they are issued or are available from our previous issuances,” KenGen says in the tender documents.
KenGen is keen to maximise on the carbon credits from its vast generation of clean energy, adding that six of its renewable power plants have a potential reduction emission of 1.5 million tonnes of Carbon Dioxide Equivalent (tCO2e) annually.
KenGen, is one of the State-owned firms leading in carbon trading in Kenya with the trade turning to be a lucrative revenue earner, generating billions of shillings.
The Olkaria I Units 4 & 5 Geothermal Project has the highest number of CERs on offer in KenGen’s latest sale offer at 853,361 CERs followed by the Olkaria IV Geothermal at 840,945 CERs and the Olkaria II Geothermal Expansion Project (111,904 CERs).
The CERs were issued in June last year, two months after KenGen entered into a deal with Sintmond Group for sale of 4.62 million CERs with each CER priced at about $6.94 (Sh896.57 at current exchange rates).
Sintmond Group is based in Nairobi and is backed by Hitachi Zosen Inova, a waste management technology provider headquartered in Zurich, Switzerland.
Trading of CERs is key to bolstering KenGen’s efforts to diversify and grow revenues, as the company stays on the profitability path.
KenGen’s net-profit in the half year ended December 2024 jumped 78.9 percent to Sh5.29 billion from Sh2.95 billion in corresponding period a year earlier.
Kenya has put six renewable power generation projects under the Clean Development Mechanism (CDM) under the Kyoto Protocol.
The other projects are the expansion of the Kiambere Hydro Power Project, overhauling of the Tana Hydro Power Station Project and the 5.1-Megawatt (Mw) Grid Connected Wind Electricity Generation at Ngong Hills.
Carbon credits allow an organisation to emit a certain amount of greenhouse gases to the environment with the units purchased from owners of forests or assets that are environment friendly, like renewable power projects.
Trading of carbon credits is key in helping to curb climate change while helping to build local capital markets for sustainable development.
Kenya has in the past two years aggressively moved to tap revenues in the relatively new carbon trading market, with the country leveraging on existing forests, planting of trees and projects that are environment friendly.
The government last year enacted a law to guide carbon trading and is also set to create a National Carbon registry.
The registry will be an accounting tool to document Kenya’s verified carbon credits and emission reductions under Article 6 of the Paris Agreement.
The Paris Agreement—signed in 2015 during the United Nations Climate Change conference—requires member countries to set up robust accounting to prevent double-counting to voluntary steps to reduce carbon emissions.
