Electricity utility firm Kenya Power and Lighting Company has signed a carbon trading deal with Standard Bank, CfC Stanbic Bank’s parent company that sets the stage for clean energy production in Kenya.
This is the culmination of a process that began after several organisations approached KPLC for partnership in the development of Clean Development Mechanism (CDM) projects.
Speaking at the signing ceremony, KPLC chief executive Joseph Njoroge said the new deal opens up a new revenue stream as the company pursues its diversification strategy.
Mr Njoroge said the partnership makes both KPLC and Standard Bank active participants on environmental matters.
“We estimate that this project will enable us to avoid emission of about 90,000 tonnes of carbon dioxide into the atmosphere per year, thereby mitigating climate change. If registered by the United Nations Framework Convention on Climate Change (UNFCCC), this can generate about $1.25 million annually based on the current carbon exchange trading rates,” said Mr Njoroge.
Through the move, KPLC further expects to record an energy conservation of about 128,550kWh per year, a reduction of peak demand by about 60MW which would otherwise amount to $83.75 million in investment in generation capacity, a reduced electricity bill for customers, reduced thermal generation and fuel cost adjustment charges.
CfC Stanbic Bank through its parent company Standard Bank’s carbon trading desk in London will structure KPLC’s Efficient Lighting Clean Development Mechanism project and other carbon assets as KPLC takes a lead role in green energy solutions.
CfC Stanbic has been working to develop its carbon business in Africa over the past two years.
“We have a presence in 17 sub-Saharan countries which allows us to better understand the needs of our clients and how to offer the best structures on carbon trade, often combining with other products offered by the bank such as project finance or foreign exchange and interest rate trading,” said Greg Brackenridge, CFC Stanbic managing director.
Under this agreement, the power utility firm will receive proceeds from the sale of certified emission reduction.
Other possible carbon projects include light emitting diode lighting technologies, SF6 circuit breakers, grid extension projects, and off-grid renewable energy projects.
By MICHAEL OUMA www.theeastafrican.co.ke
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