Kenya's Ministry of Energy is proposing a suite of incentives to attract private investors in geothermal energy, aiming to accelerate the development of the country's vast untapped resources. This move comes as the government seeks to meet surging electricity demand and reduce reliance on expensive imports, with current geothermal capacity significantly below its potential.

• Proposed incentives include tax exemptions, longer-term Power Purchase Agreements (PPAs) with Kenya Power, and cost-reflective tariffs.
• Kenya’s geothermal potential is estimated at over 10,000 megawatts (MW), but the installed capacity is currently only 984MW, with over 75% developed by KenGen.
• The Ministry aims to address challenges such as high upfront costs, limited public financing, and the 2018 moratorium on new PPA signings, which led to a lull in project development.
• Kenya’s peak electricity demand is projected to grow to about 6,500MW by 2035 and 13,495MW by 2043, necessitating major investment in local generating capacity.