Time flies with great content! Renew in to keep enjoying all our premium content.
Prime
KenGen relaunches Sh4bn carbon credit sale after deal collapses
Kenya Electricity Generating Company (KenGen) workers walk at the Olkaria II Geothermal power plant near the Rift Valley town of Naivasha, Kenya on February 15, 2018. KenGen is aligning with Paris Agreement carbon markets by advancing innovative green and low-carbon energy technologies.
Kenya Electricity Generating Company (KenGen) has reopened the search for a buyer for its 4.62 million Certified Emission Reductions (CERs) after a previous deal worth $32.05 million (Sh4.14 billion) fell through.
The electricity generator had entered into a contract with Sintmond Group —a Nairobi-based firm that offers energy solutions, inspections and waste disposal or recycling — to buy the CERs, but KenGen now claims the firm has failed to honour the payment.
This has forced KenGen to reopen the tender to find new buyers for the CERs. It is not clear why the firm failed to make the payment, or whether it will be fined for this.
Carbon credits, also known as carbon offsets, are permits that allow owners to emit a certain amount of carbon dioxide or other greenhouse gases. One credit permits the emission of one tonne of carbon dioxide or the equivalent in other greenhouse gases.
The search for a new buyer of the 4.6 million CERs is running alongside another seeking purchasers for 1.8 million tonnes of CERs that KenGen was awarded last year from three geothermal projects in Olkaria.
“The previous contract for sale of CERs was unsuccessful hence the re-tender for sale of the previous 4.6 million CERs and 1.8 million CERs issued in 2024,” KenGen said in response to Business Daily.
Sintmond Group is based in Imara Daima and is backed by Hitachi Zosen Inova (HZI) — a waste management technology provider in Zurich. HZI announced its entry into Kenya in 2022 through a partnership with Sintmond.
KenGen had entered into a contract with Sintmond in mid-April last year, giving the firm until the end of January this year to pay for the CERs.
The 4.6 million carbon credits come from KenGen’s six projects —Olkaria II geothermal expansion, redevelopment of Tana Hydropower Station, optimisation of Kiambere Hydropower, Olkaria IV Geothermal, Olkaria I Units 4&5 Geothermal and the Ngong Wind.
The six are classified as clean development mechanism (CDM) projects under the Kyoto Protocol, which sets emission reduction targets for countries and facilitates technological and financial transfers to countries to support climate change mitigation and adaptation initiatives.
The first KenGen project to be issued with carbon credits under the CDM initiative was the Tana hydroelectric power project, which received 57,458 carbon credits on March 13, 2020.
Carbon credit trading involves the purchase of credits by firms that have exceeded their emission limits. Most trading takes place on carbon trading exchanges in the US and Europe.
KenGen has pledged to voluntarily dedicate 10 percent of its income from the sale of CERs to supporting neighbouring communities, with the balance financing the expansion of existing projects and the development of climate resilient energy programmes.
KenGen is strategically positioning itself within the carbon market frameworks under the Paris Agreement by developing innovative green, renewable, low-carbon energy technologies.
