Kenya: building a sustainable future
Kenya is East Africa’s largest economy and due to its strategic location, has a high profile on the international stage. As such, the country’s growing shift towards sustainable development and the transition towards a low-carbon economy has profound, positive and far-reaching implications.
It has become increasingly understood within the Kenyan corridors of power that national and regional environmental, economic and social challenges are best answered with sustainable solutions. As a result, a holistic approach to addressing water scarcity; food, energy and housing shortages; urban migration; and low foreign direct investment (FDI) is made possible.
In Kenya, this is already gradually seeing a more equitable distribution of opportunity, enhanced autonomy for its regions and a marked increase in private sector investment in green real estate, infrastructure and natural resources projects.
The concept of sustainable development may be global, but there is no ‘one size fits all’ solution.
In Kenya, as elsewhere, bespoke frameworks and solutions have been put in place to take account of the country’s unique dynamics to deliver the best and greenest possible outcomes.
For example, the Government’s flagship ‘Big Four Agenda’ pertaining to food security, manufacturing, affordable housing and healthcare is benefitting from the adoption of a net zero agenda. This is serving to provide an adaptation mechanism to emerging climate change, build local resilience and draw in the private sector, all of which is helping to generate sustainable investment.
Public and private sectors united
With President Kenyatta acknowledging the pressing need to implement sustainable development commitments, this speaks to an understanding among Kenya’s policymakers that not only is climate change very real, but that the benefits of implementation far outweigh the costs.
So, while it may be the private sector financially spearheading the drive to net zero, the Government has sought to incentivise green development through PPPs and initiatives that include the zero rating of solar panels and a nationwide ban on all plastic packaging.
Kenya’s new green-enabling landscape appeals to foreign investors, particularly blue-chip firms such as Diageo, General Electric, Coca Cola, IBM and private equity funds such as Actis, that must adhere to group-wide global sustainability commitments wherever they operate.
Just as importantly, home-grown blue-chips such as Safaricom, KCB Group, and Diageo subsidiary East African Breweries Limited’s proactive green endeavours act to further integrate sustainability into the country’s business landscape.
The growth of the green bond market in Kenya and across East Africa is further helping to mobilise private sector investment to support climate-resilient infrastructure and affordable eco-housing.
The sustainable agenda now prevailing in Kenya is making its impact felt on the built environment.
Some of the most noteworthy investment opportunities can be found in real estate that targets certifications and seeks to integrate sustainable social and economic practices. Of particular interest are data centres, which are becoming increasingly synonymous with Kenya, catering to both national demand and the wider East African market.
Strategically significant
China has recently risen to be Kenya’s principal investor and trading partner. While this has worked to catalyse infrastructure, real estate and natural resource development, the sustainable credentials of some of the projects could be considered questionable.
However, keen not to be shut out from this strategically significant region, which affords trade access to much of landlocked Central Africa through the Port of Mombasa, Western countries are courting Kenya. These fresh overtures are not only being well received, but are likely to boost the country’s sustainability prospects.
Kenya’s advance towards net zero is made easier since it already boasts a green energy mix of more than 90 percent, made up of hydro, geothermal, wind and solar.
Potential investors will also be encouraged by the Kenyan Government’s stated ambition for a 5000MW fully green increase in the national power grid.
With Kenya’s 47 counties now having the devolved authority to strike their own investment deals, this means the right projects that leverage a region’s essential strengths are more likely to be developed than those imposed by Central Government.
Kenya has understood that successful sustainable development relies on decisive action. In its approach to greening the economy it has become an exemplar to neighbouring countries. Investors are taking note and a keen interest in this strategic jewel in the East African crown.