AfDB, UK Inject $2 Billion into KPLC for Climate Change Action

African Development Bank (AfDB) and the United Kingdom have announced that Kenya’s Transmission Network Improvement Project will benefit from the innovative Room to Run Sovereign transaction (R2RS) on a Ksh.18.9 billion deal.

This joint initiative will support Kenya’s power sector by expanding and strengthening the national electricity grid system in line with AfDB’s Last Mile Connectivity Program.

“We’re working together with the AfDB and Kenya to deliver what Kenyans want and need; reliable power for reliable economic growth, all with green energy that protects the prospects of future generations,” said Neil Wigan OBE, UK High Commissioner to Kenya.

The total project cost is Ksh.18.9 billion ($116 million), of which up to Ksh.9.6 billion ($59 million) is allocated to the climate mitigation component and supported by additional capital from the UK government guarantee.

The project, which was approved last year, aims to overcome transmission network constraints, improve reliability and quality of electricity supply, and lower high-power system losses in Kenya.

R2RS, which was launched at COP26 in November 2021, enables more funding for critical climate change projects by providing a guarantee of Ksh.326 billion ($2 billion) to the AfDB from the UK government and City of London insurers.

This guarantee allows the AfDB to provide an additional $2 billion of climate finance to Africa by 2027, focusing on both adaptation and mitigation.

The announcement follows the UK and AfDB’s disclosure of the first two R2RS-enabled projects in May last year—a wastewater project in Egypt and a water sanitation project in Senegal.

The transaction involving Kenya’s Transmission Network Improvement Project is part of the AfDB’s wider lending program, which aligns with the demand from stakeholders at COP27 to innovate and scale up climate finance through Multilateral Development Banks.

Kevin Kariuki, Vice-President for Power, Energy, Climate, and Green Growth at the African Development Bank, expressed the institution’s dedication to promoting sustainable development in Africa through such initiatives.

This partnership marks a significant progress in developing climate-friendly infrastructure in Kenya, demonstrating the potential impact of cooperative efforts between international financial institutions and local stakeholders in tackling climate challenges.