Kenya To Consider Sovereign Green Bonds To Fund Climate Projects

(Bloomberg) --

Kenya is weighing selling sovereign green bonds and debt-for-nature swap deals to fund climate projects, President William Ruto said.

Selling a green bond “is the next thing on the horizon,” Ruto said Saturday in an interview on the sidelines of COP 28 in Dubai. He didn’t provide further details or a timeline.

The government also plans to scale up renewable-energy projects. The East African nation is planting 15 billion trees and restoring 10,000 wetlands, he said.

“We are not only supplying energy to our citizens, but using green energy to power our industrialization,” Ruto said in the interview with Bloomberg TV. “We have huge opportunities in ammonia, fertilizer. We have opportunities in green steel, in many of the other minerals available in Kenya.”

Unless Kenya takes action to mitigate the impact of climate change, extreme weather conditions will slash Kenya’s economic output, set back attempts to reduce poverty and exacerbate inequality, according to the World Bank. Under a so-called business-as-usual scenario, gross domestic product by 2050 may drop by as much as 7.3%, compared with the baseline, according to the lender’s Kenya Country Climate and Development Report.

“We must consistently make the decisions that will pull us out of these difficult situations,” Ruto said. “Some of the decisions may not be popular, some of the decisions may be difficult, but if they are the right decisions, finally, they will pull us out.”

Kenya plans to enhance renewable energy generation to 100 gigawatts from the current 3 gigawatts to power the green industrial economy, including manufacturing of ammonia and steel, Ruto said. About 92% of Kenya’s energy generation is renewable — mainly geothermal, hydro and wind.

--With assistance from Helen Nyambura, Abeer Abu Omar and Laura Millan.

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