FSD Africa, the UK Government’s flagship financial sector programme in Africa, and Parhelion, a UK-based specialist energy and climate risk finance advisory company, announced plans to launch a first-of-its-kind underwriting facility, backed by East African insurers, to de-risk early-stage development of geothermal energy projects with the capacity to significantly expand electricity access and energy sector resilience in Kenya and Ethiopia.
The energy sectors in Kenya and Ethiopia face several systemic issues as large number of people continue to live without electricity – 12.5 million in Kenya and 42 million in Ethiopia are still unconnected. Growth in energy demand is outstripping supply and current sources of energy are either carbon-emitting or climate vulnerable.
East Africa has a potential geothermal capacity of 15,000 MWe; however, just 500 MW is operational in Kenya while Ethiopia has installed just 7 MW. With support from the programme, Parhelion and FSD Africa forecast a 20% increase in geothermal output for Kenya and a 500% rise in Ethiopia, preventing more than 515,000 tonnes of CO2e per year. This is expected to create 2,600 jobs in renewable energy and insurance sectors, while bringing electricity to 5.25 million people who currently live without power.
