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Kenya Secures $4.4 Billion Deal for Green Manufacturing

Kenya Secures $4.4 Billion Deal for Green Manufacturing

The Kenya Green Manufacturing deal was announced at the African Green Industrialisation event with COP28 summit. Kenyan president, William Ruto, has always had impressive green energy ambitions and has now agreed on funding to match those ambitions which will go towards 7 green projects. The UAE will be taking a lead on this as they are currently involved in two projects representing $1.8bn of the investment. A new partnership has also emerged as an Australian firm will embark on a green fertiliser production project that is valued at $1.5bn.

Forecasts expect Kenya’s real GDP to keep increasing by 5+% per annum for the next 5 years. The forecasts indicate increasing demand for improved sustainable infrastructure, manufacturing and energy.

President Ruto has set clear targets for Kenya:

  • Aims to attain 100% transition to green energy by 2050
  • Pledged to triple renewable energy capacity
  • Double energy efficiency
  • Significantly reduce fossil fuel dependency by 2030

President Ruto is proactive, urging investors to make Kenya and Africa their choice investment destination, describing Kenya as a gateway into Africa. He has also called upon other major African leaders to follow suit.

However, Kenya must also be mindful of its debt balance. External borrowing has grown exponentially between 2013 and 2020. Total debt has jumped from $10.2bn to $34.8bn in 2020 amounting for 35.4% of GDP according to Central Bank of Kenya. Kenya needs to be careful to not go down the same route as Sri Lanka, where extensive borrowing made the economy more susceptible to collapse.

The above is for educational purposes only and does not constitute advice. You should always contact your advisor for a personal consultation.

*No liability can be accepted for any actions taken or refrained from being taken, as a result of reading the above.

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