How dollar fluctuations are driving up cost of Kenya's green buildings

In the ever-evolving landscape of Kenya's construction sector, sustainability has taken center stage. However, the fluctuating dollar exchange rates have introduced new financial challenges to green building development, leading to rising costs that developers are grappling with. To delve deeper into these issues and explore strategies to overcome them, CNBC Africa spoke with Edwin Okall, Project Manager of Pazuri at Vipingo. Edwin Okall highlighted the impact of dollar fluctuations on the cost of Kenya's buildings. He discussed how the challenges have prompted a shift towards sourcing more local resources to reduce dependency on imports. Bulk purchases and advanced planning have become essential to mitigate the effects of currency fluctuations. Renegotiating prices with suppliers has also been crucial to navigating the changing financial landscape. The materials most impacted by the fluctuation of the dollar are those imported into the country, including solar panels, lighting systems, electrical systems, plumbing, and ACs. These essential construction materials have seen their costs rise due to the currency fluctuations, emphasizing the need for strategic planning and cost efficiency. Regarding the financing of green building projects, Edwin Okall pointed out that currency fluctuations have led to delays in international investments and loans. Investors are hesitant to commit to long-term funding due to the uncertainty surrounding currency valuation. This has necessitated a closer collaboration with local financing institutions and banks to secure funding for green building initiatives. Superior Homes, the company behind the Pazuri at Vipingo project, has employed several strategies to manage the financial challenges associated with sourcing eco-friendly materials. Diversifying suppliers, storing materials during favorable currency exchange rates, and prioritizing energy-efficient technologies have been key tactics to ensure project sustainability amidst the economic uncertainties. In terms of mitigating currency volatility, the focus remains on reducing operational costs, utilizing energy-efficient and sustainable materials, and strategic planning with the project team. By aligning construction practices with the country's Vision 2030 sustainability goals, developers can navigate currency fluctuations while maintaining a commitment to green building principles. Looking towards the future, Edwin Okall envisions a growing shift towards green building development in Kenya. He anticipates increased local engineering capabilities and government incentives for green technology adoption. With the Vision 2030 agenda emphasizing sustainable urban development and resilient infrastructure, the trajectory for green building in Kenya appears promising. As more companies and regions embrace sustainability practices, the future of green building in Kenya is poised for significant growth and positive environmental impact.