Kenya embarks on ambitious green growth plan

The Government of Kenya and Fortescue Future Industries (FFI) have recently finalized a billion-dollar agreement aimed at establishing a green energy and fertilizer project in the country. This ambitious project is set to not only reduce Kenya's dependency on fertilizer imports but also lower electricity prices in the nation. In an exclusive interview with CNBC Africa, FFI CEO Mark Hutchinson shed light on the details of this groundbreaking deal. The partnership between the Kenyan government and FFI stems from a framework agreement signed back at COP by Chairman Andrew Forrest and President Ruto. The primary objective of this deal is to assist Kenya in decarbonizing from an industrial standpoint. Hutchinson expressed his enthusiasm for the project, highlighting the conversion of geothermal power into green ammonia for fertilizer production as a significant aspect of the initiative. This transformation will enable Kenya to decarbonize its fertilizer sector and eliminate the need for importing fossil fuel-based fertilizer from countries like Russia, making the production process local and sustainable. The implementation of the project involves utilizing the green power derived from geothermal sources to generate green hydrogen and ammonia, which will then be utilized in local fertilizer manufacturing. Hutchinson emphasized the importance of the investment support agreement signed with the Kenyan government, which aligns various governmental entities to facilitate the project's swift execution. When questioned about the financial details and timeline of the project's commencement, Hutchinson mentioned that the groundwork has already begun, with the exact costs expected to be determined over the next few months. The final investment decision is anticipated by the end of the calendar year, where comprehensive information regarding the project's scope and costs will be shared with the public. The venture is set to encompass a substantial capacity of close to 300 megawatts and is forecasted to play a pivotal role in Kenya's efforts to become self-sufficient in fertilizer production. Kenya currently heavily relies on fertilizer imports, and the project aims to address this by utilizing the generated power to substitute imported fertilizers with locally produced sustainable alternatives. Furthermore, the project aligns with Kenya's goal of transitioning to 100% green energy by 2030. While Kenya has already made remarkable progress in sourcing 70% of its electricity from renewable sources, the project targets the remaining 30% to facilitate the grid's complete decarbonization. Hutchinson commended Kenya's renewable energy achievements and emphasized their commitment to supporting the country in achieving its green energy objectives. In light of the reduction in fertilizer use across the continent, Hutchinson acknowledged concerns raised by UNCTAD regarding cost implications. However, he emphasized that the demand for fertilizers in Kenya remains substantial, with the country requiring significantly higher volumes to enhance crop yields. The project not only addresses the cost concerns but also presents an opportunity for other African nations to consider similar sustainable initiatives. Looking ahead, Hutchinson outlined FFI's interest in expanding similar projects to other African countries, aiming to both bolster domestic green energy production and explore opportunities for exporting green molecules such as hydrogen and ammonia to global markets. Countries like Gabon, the Democratic Republic of Congo, Cameroon, Ethiopia, Namibia, and South Africa are among the nations on FFI's radar, highlighting the vast potential for sustainable energy initiatives across the African continent. The billion-dollar deal between Kenya and Fortescue Future Industries signifies a significant step towards promoting green growth, enhancing energy security, and fostering sustainability in the region. As Kenya embarks on this transformative journey towards self-sufficiency in green energy and fertilizer production, the partnership with FFI sets a precedent for similar ventures that have the potential to revolutionize the energy landscape in Africa.