UK Supports New Climate Initiative, Strikes COP27 Deals with Kenya by COP28

• UK and Kenya have progressed transport, geothermal and agriculture projects agreed at COP27
• The UK has helped design President Ruto's green industrialisation initiative
• UK will also invest KES 1 billion ($7.1m) million for solar powered irrigation and 100 electric buses

Flagship climate projects fast-tracked at COP27 between the UK and Kenya have reached milestone achievements ahead of COP28 with multiple projects making progress since last year's climate summit.

The UK has also supported the design and development of President Ruto's new industrialisation initiative for Africa - the Africa Green Industrialisation Initiative (AGII). The projects support this initiative by creating jobs, increasing economic growth and boosting trade.

The KES 12.5 billion Menengai Geothermal project - which will generate 35MW of electricity, providing approximately 750,000 Kenyans with affordable, clean energy and create 200 jobs during construction, is proceeding to financial close with construction expected to begin shortly after.

A KES 31 billion agreement has also been reached with the Kenyan Development Corporation and UK-funded investor United Green to establish an area bigger than Nairobi National Park for climate-smart farming - this will save Kenya $200m annually on food imports and help reduce Kenya's trade deficit.

These are the latest developments for the six deals agreed between President Ruto and Prime Minister Sunak at COP27 - which total over KES 500 billion of investment. Exactly one month after the 2022 summit in Egypt, construction began at Nairobi Railway City - a green, urban regeneration project centred around a new railway station in Nairobi. Ground was broken at Menengai Geothermal in June of this year, and the United Green-KDC agreement becomes the latest milestone.

These investments are flagship projects of the UK-Kenya Strategic Partnership - an ambitious five-year agreement which is unlocking mutual benefits for the UK and Kenya - and do not load Kenya with unsustainable debt.

British International Investment will also announce KES 1 billion ($7.1m) for two projects in Kenya, as part of a wider package of investment in Africa.

KES 321 million ($2.1m) will provide solar-powered and water-efficient irrigation systems to 9,000 farmers in Kenya, which will help to increase farmers income as well as build their resilience and adapt to the impact of climate change. The upfront cost of the irrigation systems will also be reduced by 25-40% through an innovative carbon credit facility, making the systems more affordable for farmers.

KES 765 million ($5m) will go towards the manufacture of 100 electric buses - in Kenya - that will meet Kenyan's demand for affordable but clean public transport. As they replace diesel powered polluters, they will stop 5,000 tonnes of CO2 entering the atmosphere every year.

British High Commissioner to Kenya, Neil Wigan, said:

It is a sign of the strength of the UK-Kenya Strategic Partnership that these three projects have reached new milestones by COP28. The UK and Kenya are going far and going together. We are proud to support the President's AGII. Combined with these investments from British International Investment, the UK and Kenya will deliver what Kenya's people want - growth, jobs and trade - in a way that is sustainable and protects our planet".

Notes

The Ruto / Sunak COP27 Deals

To note - exchange rate accurate at time of publishing in November 2022.

1. Menengai Geothermal: KES 12.5 billion investment. Ground was broken in June 2023. A 35 MW geothermal project led by GDC and Globeleq, which is backed by British International Investment, which will mark the full development of a field discovered by GDC. The project has a signed and effective Power Purchase Agreement with KPLC that confirms one of the cheapest tariffs for baseload renewable power.

2. Nairobi Railway City: KES 11.5 billion investment. Construction began in December 2022. A green regeneration of central Nairobi, anchored around a new central rail station connected to Bus Rapid Transit, incorporating the latest innovations in green building technology and planning. The project has been developed with technical assistance from the UK Government and UK architects (Atkins) won the contract to design the new station.

3. Malindi Solar Expansion: KES 7.5 billion investment. A 40 MW solar plant, constructed by UK company Globeleq with finance from British International Investment, which was connected to the grid in December 2021. Plans will double the size of Malindi Solar and add battery storage - an additional KES 11.7 billion investment - making over KES 22 billion total.

4. Grand High Falls Dam: KES 425 billion investment. A Public Private Partnership on the Tana River that will generate 1,000MW of hydroelectric energy capacity and irrigation for 400,000 hectares of farmland. Led by UK engineering firm GBM, the project is envisaged to include both a Power Purchase Agreement for clean energy and a Water Purchase Agreement for agricultural irrigation.

5. United Green: KES 31 billion investment. MOU agreed in November 2023. Climate-smart crop and agro-industrial processing system via a joint venture with Kisumu County that will create 2,000 direct jobs and provide an income for a further 20,000 farmers across counties the Lake Victoria region.

6. Guarantees: The UK Government, through the Private Infrastructure Development Group, is collaborating with CPF Financial Services and other private investors, including Cardano Development, to launch a new guarantee company that will de-risk investments and unlock private finance from pension funds and insurance companies for projects in Kenya. The UK government will commit KES 2 billion to the company, which will mobilise KES 12 billion of new climate finance for Kenyan infrastructure over the next 3 years.

BII investments

To note - exchange rate is current

1. Solar Irrigation: First investment under an MOU between British International Investment and Shell Foundation. A combined ($2.1m from BII and $500k from Shell Foundation) KES 398 million ($2.6m) carbon credit pilot investment into SunCulture - a Kenya-based company that provides solar-powered irrigation systems to smallholder farmers - to scale the supply of solar and water-efficient irrigation in Kenya. This builds on previous research and development investment into SunCulture from the UK.

2. Electric Buses: KES 765 million ($5m) investment for BasiGo Ltd., Africa's leading Electric Bus solution provider, to scale local assembly and establish a new green hub for modern electric buses in Kenya. 100 electric buses will be delivered through BasiGo's innovative Pay-As-You-Drive financing model which enables bus operators to acquire electric buses without incurring the high upfront cost.

About British International Investment

British International Investment is the UK's development finance institution and a trusted investment partner to businesses in Africa, Asia and the Caribbean. It invests to support the UK Government's Clean Green Initiative and to create productive, sustainable and inclusive economies in eligible markets. Between 2022-2026, at least 30 percent of BII's total new commitments by value will be in climate finance. F