Undp Lecb Kenya - Clean Energy NAMA 2016

Empowered lives. Resilient nations.
NATIONALLY APPROPRIATE
MITIGATION ACTION ON
ACCESS TO CLEAN ENERGY IN RURAL
KENYA THROUGH INNOVATIVE
MARKET BASED SOLUTIONS
United Nations Development Programme
Contact Information
Principal Secretary, Ministry of Environment Natural Resources and Regional Development Authorities /
psoffice@environment.go.ke
Dr. Alexandra Soezer, United Nations Development Programme (UNDP), Low Emission Capacity Building Programme (LECB) /
alexandra.soezer@undp.org
Technical Oversight and Guidance

Dr. Harun M. Warui, Ministry of Environment & Natural Resources / UNDP
Dr. Alexandra Soezer, Climate Change Technical Advisor, Low Emission Capacity Building Programme (LECB)
Authors
Mr. Arindam Basu and Dr. James D. Marett at Grue + Hornstrup; and Mr. Stefan Wehner at the greenwerk
Contributors
Mr. Tom Owino at ClimateCare; Mr. Douglas Marett at Grue + Hornstrup
Acknowledgements
We would like to acknowledge the following stakeholders for their participation in the NAMA process: Timothy Ranja -
UNDP, Veronica Lekopole - CAGE, Stephen Kiama – KEFRI, John Katimbwa - Matatu Welfare Association, Nyaga Kebuchi
– Sustainable Transport Africa, Andrew Cheboi – NETFUND, Suresh Patel - KAM/KEPSA, Francis Nderitu – MOEP, Nathan
Bogonko – KIRDI, David M. Kigo - Nairobi County, Fenwicks Musonye – ERC, David B. Adegu – MENRRDA, Joash Obare
– ClimateCare, James M. Gatimu - GVEP/CCAK, Michael Muchiri –MOTI, John Kioli – Green Africa Foundation, Elizabeth
Murua – MENRRDA, Ivy Murgor – MENRRDA, Richard Mwangi – KFS, Lucy Kamande – MENRRDA, Salome Machua –
NEMA, Harrison Oloo – WENMAK
Editor
Georgina Wilde
Design
Kimberly Koserowski
Disclaimer: The views expressed in this publication are those of the author(s) and do not necessarily represent those of the United Nations,
including United Nations Development Programme (UNDP), or their Member States.
UNDP LOW EMISSION CAPACITY BUILDING (LECB) PROGRAMME
This product was developed under the LECB Programme, with generous funding from the European
Commission (EC), the German Federal Ministry for the Environment, Nature Conservation, Building and
Nuclear Safety (BMUB), and the Australian Government.
The UNDP Low Emission Capacity Building (LECB) Programme is a country-driven initiative that promotes
essential cooperation between relevant institutions, engaging the public sector and industry in a concerted
effort to design and implement approaches to low emission development that are consistent with national
development priorities. National counterparts are supported to strengthen technical and institutional
capacities to identify and formulate Nationally Appropriate Mitigation Actions (NAMAs) and Low Emission
Development Strategies (LEDS) in the public and private sectors, and to strengthen the underlying
greenhouse gas inventory management and Measurement, Reporting and Verification (MRV) systems.
The LECB Programme runs through 2016 and is active in 25 countries: Argentina, Bhutan, Chile, China,
Colombia, Costa Rica, the Democratic Republic of Congo (DRC), Ecuador, Egypt, Ghana, Indonesia, Kenya,
Lebanon, Malaysia, Mexico, Moldova, Morocco, Peru, Philippines, Tanzania, Thailand, Trinidad and Tobago,
Uganda, Vietnam and Zambia.
The programme is supported through generous contributions from the European Commission, the German
Federal Ministry for the Environment, Nature Conservation, Building and Nuclear Safety (BMUB), and the
Government of Australia.
More information can be found at www.lowemissiondevelopment.org
Empowered lives.
Resilient nations.
2 TABLE OF CONTENTS
TABLE OF CONTENTS
List of Figures 6
List of Tables 6
Abbreviations and Acronyms 8
Executive Summary 10
1. Introduction to NAMAs 12
1.1 Setting the Context 12

1.2 Nationally Appropriate Mitigation Actions 13
1.3 Clean Energy NAMA – An Opportunity for Kenya 13
1.4 Purpose and Objectives of the NAMA 15
2. Background to Kenya 16
2.1 Country Topography 16

2.2 Country Administration 17
2.3 Climate 17
2.4 Demography 17
2.5 Socio-Economic Situation 18
3. Background to the Energy Sector 20
3.1 Renewable Energy Potential in Kenya 20

3.2 Key Actors – Kenya Energy Sector 21
3.3 Rural Electrification Authority (REA) 22
3.4 Analysis of Household Energy 22
3.5 Current Fuel Use in Households 23
3.6 Use of Improved Cookstoves in Kenya 24
3.7 Solar PV Lighting in Kenya 24
3.8 Barriers to Adoption of Clean Energy Technologies 25
3.9 Key Drivers for Market based Approach 26
4. The Policy Environment in Kenya 28
4.1 Constitution of Kenya 28

4.2 Vision 2030 29
4.3 The Second Medium Term Plan (SMTP) 30
NATIONALLY APPROPRIATE MITIGATION ACTION ON ACCESS TO CLEAN ENERGY IN RURAL KENYA
THROUGH INNOVATIVE MARKET BASED SOLUTIONS 3
4.4 National Climate Change Action Plan (NCCAP) 31

4.5 National Energy and Petroleum Policy 32
4.6 Other Programmes 33
4.7 Summary and Conclusion 33
5. NAMA Baseline Information 36
5.1 The NAMA Boundary 36

5.2 GHG Emission Reduction Baseline 37
5.2.1 Kenya: Access to Energy 37
5.2.2 Identified Approach for Determining GHG Emission Reduction 37
5.3 Sustainable Development Baseline 39
5.3.1 Kenya Status – MDG 39
5.3.2 The SD Tool: 40
5.4 NAMA Target 43
5.5 Alignment with the INDC 44
5.6 Alignment with Sustainable Development Goals: 45
6. NAMA Intervention – Private Sector-enabled Business Model 48
6.1 Energy Productivity Zones (EPZs)—The Change Agent 48

6.2 Intervention 1: Establish 28 EPZs in Kenya with their own PV Power Plant 49
6.2.1 Intervention 1—Outcome 1: 28 of EPZs Established 50
6.2.2 Intervention 1—Outcome 2: 500 kWp of Solar PV-based power plant implemented 51
6.3 Intervention 2: Distribute Clean Energy Technologies enabled through consumer finance 52
6.3.1 Intervention 2 – Outcome 1: 1 million PV lanterns distributed 53
6.3.2 Intervention 2 – Outcome 2: 1 million ICS distributed 54
6.3 Eligibility Criteria - Private Sector Engagement 55
6.4 Driving Interventions through Business Models 56
7. Capacity Development 60
7.1 Capacity Development Measures for Intervention 1 61

7.1.1 Technical Feasibility Study for pre-determined EPZ locations 61
7.1.2 Highlight Quality Standards 64
7.1.3 Capacity Development for the NCA and NIE 66
7.1.4 Private Sector Awareness Creation 67
7.1.5 Training of Staff and Workers 68
7.2 Capacity Development Measures for Intervention 2 69
4 TABLE OF CONTENTS
7.2.1 Public Procurement Scheme 69

7.2.2 Marketing and Awareness Creation 70
7.2.3 Capacity Development for Financial Entities (e.g. Banks). 71
7.2.4 Training of Staff and Workers 72
7.3 Summary on Capacity Development Measures 72
8. Implementation Structure 74
8.1 Governance and Management 74

8.2 Institutional Framework for NAMA Implementation and Management 75
8.2.1 National NAMA Approver/Focal Point 76
8.2.2 National Coordinating Entity (NCA) 76
8.2.3 NAMA Implementing Entity (NIE) 77
8.2.4 NAMA Executing Entities (NEEs) 80
8.3 Implementation schedule 81
9. NAMA Finance 84
9.1 Overview of NAMA Finance 84

9.2 NAMA Finance required for Intervention 1 85
9.2.1 Loans for EPZ Business Model 85
9.2.2 Grants for Solar PV Power Plant 87
9.3 Consumer Finance for Intervention 2 88
9.3.1 End Consumer – Equity Contribution 88
9.3.2 End Consumer – Revolving Loan Fund 90
9.4 NAMA Finance Required for Measures 93
9.4.1 Financial Measures for initiating NAMA Implementation 93
9.4.2 Finance for Public Procurement 95
9.4.3 Finance for NCA/NIE Staff 97
9.5 Summary of Financial Requirements: 97
10. NAMA MRV System 100
10.1 Measurement 101

10.1.1 GHG Mitigation 101
10.1.2 Sustainable Development Benefits 106
10.1.3 Measurement – SD Parameters 107
10.2 Reporting 111
10.3 Verification 112
References 114
Annex es 116
NAMA Summary 116
Outputs, Activities and Measures 117
119
6 LIST OF FIGURES, LIST OF TABLES
LIST OF FIGURES
Figure 1: A Simple Overview of the NAMA Outcomes 14
Figure 2: Map of Kenya 16
Figure 3: Map of Kenya showing Population Density 36
Figure 4: Overview of the objectives, interventions and outcomes of the NAMA 59
Figure 5: Schematic Representation of Capacity development by Government Agencies 66
Figure 6: Schematic Representation of Institutional Structure for the NAMA 75
Figure 7: The Implementation Cycle of the NAMA 83
Figure 8: Schematic Representation of the Revolving Loan Fund 90
Figure 9: Schematic Representation of a Strategic CSA Model 96
Figure 10: Schematic overview of the MRV reporting structure 111
LIST OF TABLES
Table 1: Renewable Energy Potential in Kenya (Ayieko, 2011) 20
Table 2: Number of Households by Fuel type for Lighting and Cooking in Kenya (KNBS, 2009) 37
Table 3: Kenya MDG Progress Snapshot (MoDP, 2013) 39
Table 4: The SD Tool and the indicators relevant to the NAMA 41
Table 5: NAMA targets for various indicators as shortlisted using the SD Tool 43
Table 6: Relevance of the NAMA to stated mitigation priorities in Kenya’s INDC 44
Table 7: Direct SD benefits from the NAMA in the context of SDGs 45
Table 8: Comparison between the two types of EPZs defined under the NAMA 50
Table 9: Two technology product categories for two distinct sets of end consumers 51
Table 10: Schematic representation of suggested approach 52
Table 11: Indicative number of units of PV lanterns manufactured across the lifespan of NAMA 53
Table 12: Indicative number of units of ICS `manufactured across the life span of NAMA 55
Table 13: Types of capacity development measure proposed under the NAMA 61
Table 14: Existing access to energy by County (No. of households rounded to nearest, 000) 62
Table 15: Summary table for Capacity development Measures 72
Table 16: Number of new business enterprises / NEEs by Business Model type 80
Table 17: Summary table for NAMA Finance – Interventions 84
Table 18: Summary table for NAMA Finance Measures 85
Table 19: Indicative start year for EPZ implementation 86
Table 20: Summary table for Loans required for EPZ and Business Models 86
Table 21: Summary table for Grants required for PV Power Plant 87
Table 22: The proposed distribution of clean energy technologies by year (i.e. direct sale) 88
Table 23: The equity and loan components for 800,000 Units 89
Table 24: Loan pay back required for 1.6 Million Units (Table 22 provides values for 800,000 Units) 91
Table 25: Actual NAMA Finance Required annually for 16 Million Units 92
Table 26: Estimated finance and number of units distributed under Public Procurement 95
Table 27: NAMA Finance Overview – Annual Values 98
Table 28: NAMA Finance Overview – Total Values 98
Table 29: Estimation of emission reductions achieved under the NAMA (tCO2) 102
Table 30: NAMA Targets (as per the SD Tool) tracked under the MRV 106
8 ABBREVIATIONS
ABBREVIATIONS AND ACRONYMS

BAU Business as usual
CCAK Clean Cookstove Association in Kenya
CDM Clean Development Mechanism
CEEC Centre for Energy Efficiency and Conservation
COP Conference of Parties
CSA Corporate Sustainability Actions
CSR Corporate Social Responsibility
CTCN Climate Technology Center and Network
ERC Energy Regulatory Commission
EPZ Energy Productivity Zone
GDC Geothermal Development Company
GHG Greenhouse Gas
GoK Government of Kenya
HDI Human Development Indicator
ICS Improved Cookstoves
INDC Intended Nationally Determined Contribution
IPPs Independent Power Purchasers
KEBS Kenya Bureau of Standards
KenGen Kenya Electricity Generating Company
KEREA Kenya Renewable Energy Association
KETRACO Kenya Electricity Transmission Company
KNBS Kenya National Bureau of Statistics
KPLC Kenya Power and Lighting Company
LECBP Low Emission Capacity Building Programme
LED Light Emitting Diode
MDG Millennium Development Goal
MOEP Ministry of Energy and Petroleum
MRV Measurement, Reporting and Verification
NA NAMA Approver
NAMA Nationally Appropriate Mitigation Action
NCA NAMA Coordinating Authority
NCCAP National Climate Change Action Plan
NCCRS National Climate Change Response Strategy

NEMA National Environmental Management Authority
NERA National Electricity and Renewable Energy Authority
NEE NAMA Executing Entities
NEP National Energy Policy
NEPP National Energy and Petroleum Policy
NIE NAMA Implementing Entity
PV Photovoltaics
RE Renewable Energy
REA Rural Electrification Authority
RERAC Renewable Energy Resources Advisory Committee
RLF Revolving Fund
SD Sustainable Development
SDG Sustainable Development Goal
SE4All Sustainable Energy for ALL
SHS Solar Home Systems
STMP Second Medium Term Plan
UNFCCC UN Framework for Climate Change Convention
10 EXECUTIVE SUMMARY
EXECUTIVE SUMMARY
The successful conclusion of the Paris Agreement calls for 190+ parties/countries to participate in climate
actions through adaptation and mitigation, limiting the effects of global temperature increase. One of the
frameworks (Article 6, Paragraph 8 of the Paris Agreement) recommended under mitigation calls for “non-market
based approaches to assist implementation of their nationally determined contributions”. (UNFCCC_COP21,
2015). Currently the UNFCCC’s Nationally Appropriate Mitigation Actions (NAMA) framework is ideally placed
for developing countries such as Kenya to harness finance, technology, capacity development and facilitate
implementation of technical interventions that lead to emission reduction and sustainable development.
This document follows the NAMA framework and introduces an innovative market based approach through
private sector participation for the manufacture and distribution of 1 million units of solar PV-based lanterns
and improved cookstoves respectively (collectively referred to as “Clean Energy” technologies or solutions in this
document) in Kenya.
This “innovative market based approach” entails the establishment of 28 Energy Productivity Zones (or EPZs)
across Kenya that are self-sufficient in their electricity requirements. The power for the EPZs will be supplied
through a solar power plant (with solar panels either installed on the building roof tops or on open ground as
appropriate) with a total capacity of 500 kWp for the 28 EPZs.
The EPZs will provide infrastructure and support services for the private sector to invest in the manufacture and
distribution of the clean energy technologies on a for-profit basis (i.e. operated as business models).
The suggested approach looks at creating an appropriate enabling market environment for the private sector to
take a lead in promoting “Made in Kenya” clean energy technologies, leading to sector transformation in addition
to emissions reduction from use of clean energy and a corresponding boost to sustainable development.
The NAMA proposal explores making available finance through a combination of international grants and loans
in addition to contributions (financial and in-kind) by the country. The technical interventions will be supported
through a variety of measures to create an enabling market environment.
The suggested approach proposed is sustainable, as the focus is on providing access to energy to the people of
rural Kenya and in addition to creating and building momentum for a market for clean energy technologies.
In order to facilitate the purchase of the technologies this NAMA also provides attractive consumer finance
mechanisms, through a revolving loan fund and other measures, that will ensure universal access to both
technologies, even for the poorest in Kenya. Finally, the NAMA will also ensure fully integrated and coordinated
efforts by both national and county/city/rural governments and the private sector in implementing these
objectives and resulting interventions.
This document focuses on the key building blocks of a NAMA required to implement the proposed approach
and aims to provide national stakeholders and potential donors with detailed information regarding the overall
structure. Information contained in this document includes the following chapters:
1. Introduction to NAMAs
2. Background to Kenya
3. The Clean Energy Sector in Kenya

4. The Policy Environment
5. Baseline Information and Targets
6. Technical Interventions
7. Capacity- Building Measures
8. Implementation and Governance
9. Finance
10. The MRV System
The ultimate objective of this NAMA proposal is to achieve lasting results, which will depend on its ability to
facilitate the transformation of the energy sector in Kenya, particularly in the context of providing energy to
households in rural Kenya. The NAMA therefore aims to achieve 10 key success factors that the document
identifies to create a pathway for the effective and sustainable implementation of a mitigation programme
that can lead to green and sustainable growth. The NAMA therefore will promote:
■ Sector Transformation: Spur development of an environment which facilitates transformation of the

energy sector in Kenya, particularly for rural households.
■ Alignment with national priorities: Be fully embedded in Kenya’s national and sectoral development
policies, strategies and targets.
■ Define Interventions: Detail concrete technological actions that will lead to real, transparent and
measureable emission reductions and help the country to achieve its national goals and targets while
contributing to collective efforts on international climate actions.
■ Define Eligibility Criteria: Clearly define the eligibility criteria for private sector participation and
funding.
■ Value for Money: Be cost effective and provide value for money.
■ Approval Structure: Define a structure for approval of funding to beneficiaries of grant and
concessional loans to ensure transparent disbursement of funds.
■ Management Entity: Detail an institutional and management system for smooth implementation.
■ Capacity Development: Define capacity development measures to drive the technical interventions
and sector transformation
■ Finance: Include a financial plan and management in sufficient detail.
■ Measurement Reporting and Verification (MRV): Apply transparent and robust MRV for GHG
Emission Reductions and Sustainable Development Impacts.
Additionally, this document refers to a #Sustainable Development Evaluation Tool (also referred to as SD Tool
in this document) provided by UNDP to elaborate on the specific indicators that will be tracked under the
NAMA to measure the specific outcomes of the proposed activities.
12 INTRODUCTION TO NAMAS
1.1 Setting the Context

In Kenya, wood fuel, charcoal, dung and agricultural residues are widely used for cooking while kerosene is
used mostly for lighting in rural homes and in peri-urban settlements.
Direct fuel combustion of biomass from wood sources, such as wood fuel and charcoal, is the dominant fuel
source in Kenya. Wood fuel is also an important energy source for rural households and small-scale rural
industries. Households in informal settlements in Kenya depend almost entirely on woody biomass charcoal,
for basic cooking. Kerosene, in conjunction with other carbon intensive energy sources such as candles,
paraffin and biomass remains the principal source of lighting. Biomass accounts for almost 90 per cent of
energy use in rural Kenya.
The nation’s poor continue to lack access to quality healthcare, clean water and basic sanitation, education
and modern energy technologies. In rural areas, the quality of air is affected by over-reliance on fuel wood,
agricultural activities and poor housing. There are several studies that note that exposure to smoke from
burning biomass and kerosene increases the risk of childhood acute respiratory infections and is among one
of the leading causes death for children below 5. Indoor air pollution is possibly the most important cause of
chronic obstructive pulmonary disease in the non-smoking population.
Clean Energy technologies/solutions in the form of Improved Cook Stoves (ICS) which allow biomass (wood
fuels, charcoal etc.) to be burnt more efficiently and of solar powered lanterns, which are not dependent
on fossil fuels, help to address many of these macro socio-economic challenges. By increasing access to
affordable lighting, cooking and energy for productive income- generating activities, renewable energy or
clean energy technologies offer an unprecedented opportunity to accelerate the expansion of energy access
in remote and rural areas while at the same time contributing to the transition to modern energy services.
Access to clean energy technologies also results in significant socio-economic benefits, such as health,
particularly for children and women who appear to bear the brunt of the ill-effects from existing harmful
sources of energy (e.g. inhaling soot and other particulate matters released by burning kerosene for lighting
or woodfuels for cooking) and increasing income generation opportunities (e.g. extended lighting during
evening time can be used for gainful commercial activities).
Moreover, in making manufacturing and distribution of these clean energy technologies available, there
is an additional benefit for job creation, community development and overall improvement in the lives
of the rural communities. Thus, ensuring access to clean energy provides an opportunity as a transition
phase towards grid connected electricity by making energy available to the most remote locations in the
immediate future while promoting sustainable development of the communities served.
1.2 Nationally Appropriate Mitigation Actions

The success of the Paris Agreement signals a significant step towards the future of climate action. This
UNFCCC-led process involving over 190+ parties led to an agreement in December 2015 that saw countries
agree to cut emissions with the aim of limiting temperature increase. The agreement lays down several
“building blocks” that can help the world collectively undertake climate actions and NAMAs are expected to
play an important role in driving this transformation.
Nationally Appropriate Mitigation Actions (NAMAs) are voluntary, non-binding policy instruments that
provide a framework for pursuing a country’s socioeconomic and development goals, while contributing
towards global greenhouse gas mitigation efforts. NAMAs were first introduced at the 13th Conference of
Parties to the Kyoto Protocol (COP13) in Bali in 2007.
Many developing countries are taking steps to develop and implement NAMAs, which can help countries
achieve their growth objectives and participate in the global climate change mitigation agenda. NAMAs help
governments leverage national and international support to achieve appropriate, effective and transformational
GHG mitigation and sustainable development targets for the country and within communities.
COP 19 in 2013 saw the introduction of Intended Nationally Determined Contributions (INDCs), which were
to be submitted by all parties, developed and developing, to the UNFCCC. The INDCs formed the crucial
basis for the discussions leading to the successful Paris Agreement (COP 21) and provide an indicative list of
activities that a party is willing to undertake in the period following 2020.
Though not explicitly mentioned in the Paris Agreement, NAMAs are currently the only “framework for non-
market approach to sustainable development” (as noted in the Paris Climate Agreement) and are expected
to play an important role in helping developing countries plan and execute mitigation actions as elaborated
in their INDCs. Moreover, the overall scope of a NAMA, i.e. mitigation action combined with sustainable
development leading to sector transformation, makes it an ideal framework that can successfully balance
national development priorities with global climate actions.
1.3 Clean Energy NAMA – An Opportunity for Kenya

Kenya is a party to the UNFCCC process and is committed to tackling climate change, as indicated by its
various policies and programmes. Kenya submitted its INDC to the UNFCCC in July 2015 and has set an
emission reduction target of 30 per cent by 2030 compared with its BAU scenario. NAMAs form an essential
element of Kenya’s commitment to the UNFCCC process.
Kenya is committed to ensuring access to energy for its growing population, including bringing access
to grid electricity. Clean energy for lighting and cooking offers a unique opportunity to accelerate access
to electricity through small-scale, off-grid and stand-alone projects, often with simple and cost-effective
solutions. Additionally, clean energy provides income-generating opportunities to the local population.
Financing, whether in terms of high up-front costs or lack of access to credit, remains one of the most
significant challenges for renewable energy, particularly off-grid renewable energy. A NAMA provides an
opportunity to facilitate the flow of financing for renewable energy. In Kenya, a clean energy NAMA that is
designed within the appropriate policy environment and regulatory framework, and which has a sufficient
level of technical and financial support, could be a catalyst for transformational change in the energy sector.
The proposed clean energy NAMA for Kenya focuses on creating a market-based environment for the
manufacture and distribution of clean energy technologies, namely solar PV lanterns and improved
cookstoves (ICSs). The guiding principle for the NAMA is to encourage private sector participation in leading
sector transformation by making affordable clean energy technologies, namely solar PV lanterns and,
available to the entire population of Kenya, supported by a consumer financing scheme.
By promoting this NAMA, the resultant activities will address multiple SD objectives—poverty alleviation,
local job creation, alternative income generation, provision of income equality opportunities, improved
energy access and better health, educational and environmental conditions. More important, by creating
an enabling environment for the private sector to participate, the NAMA will ensure the longevity and
sustainability of the activities that it encompasses, even after the technical life span of the NAMA.
Figure 1: A simple overview of the NAMA Outcomes

1.4 Purpose and Objectives of the NAMA

The overall purpose of this Clean Energy NAMA in Kenya is to increase access to clean energy technologies
(i.e. PV lanterns and ICSs) in a sustainable manner while leading to transformational change.
The two Objectives of this NAMA are:
■ Objective 1: Enable the private sector to participate in the manufacture and distribution of clean
energy technologies in Kenya.
■ Objective 2: Create an enabling market environment that encourages distribution of clean energy
technologies through an appropriate financing model.

16 BACKGROUND ON KENYA
2 BACKGROUND TO KENYA
With a population of 45 million and occupying Figure 2: Map of Kenya

an area of 582,000 km2, the Republic of Kenya
is developing country located in East Africa. The
most recent World Bank data indicate a GDP value
of US$ 61 billion with an average annual growth
rate of 5-6 Per cent in the last 5 years. This makes
the country one of the most prosperous nations in
Sub-Saharan Africa, behind South Africa and Nigeria.
Nairobi, its capital, is the financial hub of East Africa
and the country is a founding member of the East
African Community. The country shares borders
with Ethiopia and South Sudan in the north, Uganda
in the west and Tanzania in the south. The eastern
borders of the country are shared between Somalia
and the Indian Ocean, with Mombasa, its second
largest city, an important port. (World Bank_Kenya,
2016)
Source: (Embassy_Kenya, 2016)

2.1 Country Topography
The country’s topography is described as simple and diverse, with its relief separated into lowlands and
uplands with varied landform types consisting of plains, escarpments, hills with low and high mountains
and breaks. From the coastline in the southeast, one comes to a narrow low-lying plain. The altitude then
gradually changes to low plateaus, mainly of a semi-arid nature that spread in the eastern and northern
parts of the country and are sparsely populated. From the low plateaus the terrain runs to an elevated
plateau and mountain region in the southwest, forming the Kenyan highlands.
The highlands contain the bulk of the country’s population and farmland. The highlands are cool and
agriculturally rich. Both large- and small-holder farming is carried out here. Major cash crops are tea, coffee,
flowers, vegetables, pyrethrum, wheat and maize. Livestock farming is also practiced. Much of the highlands
lie 1,500 to 3,000 m above sea level and are dotted by extinct volcanoes. The Great Rift Valley bisects the
highlands into east and west forming a steep sided trench of 30 to 40 miles (48 to 64 km) wide and 600 to
900 m deep. Mount Kenya the highest mountain in the country is found on the eastern side while Mount
Elgon is to the western side on the border of Kenya and Uganda.
2.2 Country Administration

Politically, Kenya is a unitary state with a multi-party political system. In 2013, Kenya introduced devolved
two tier government consisting of a national government and 47 autonomous county Governments. The
devolved government, proposed during the making of the new constitution, is primarily geared towards
achieving two main objectives.
■ Involving the people in governance;
■ Allowing better supervision and implementation of policies at the grassroots level.
The county Governments, which replace the previous provincial administrations, have the following
responsibilities:
■ Exercising the powers of enacting laws at the county level;
■ Acting as a means of oversight of the county executive;
■ Approval of plans and policies for smooth operation and management of resources and county
institutions.
2.3 Climate
Kenya’s climate varies considerably across the country. It is hot and humid onthe coast, temperate inland, and very
dry in the north and northeast parts of the country. The climate is heavily influenced by its variable topography
and the weather patterns that affect the areas around the equator. Its location also makes the country prone to
cyclical droughts and floods with climate change expected to make climate-driven events increase in intensity
and frequency. The temperatures vary dramatically, with the highlands experiencing considerably cooler
temperatures than the coastal and lowland regions. Kenya has an average annual precipitation of about 700 mm
and the amount of annual rainfall influences the agricultural productivity of the country.
2.4 Demography
Kenya ranks 145th out of 188 countries in the United Nations Development Programmes (UNDP) Human
Development Index (HDI), which measures development in terms of life expectancy, educational attainment
and standards of living. More than three quarters of the population live in rural areas, and rural households
18 BACKGROUND ON KENYA
rely on agriculture for most of their income. The rural economy, in turn, depends mainly on smallholder
farming, which produces the majority of Kenya’s agricultural output. (UNDP_HDI, 2015)
Kenya also has one of the world’s highest rates of population growth. The population has tripled in the
past three decades, increasing pressure on the country’s resources and leaving young people particularly
vulnerable to poverty. Rural women are vulnerable as well; because they do not have equal access to social
and economic assets, subsistence farming is the primary source of livelihood for most of these women.
Yet women and young people have great potential for contributing to economic development and social
progress if they are able to fulfil their potential.
2.5 Socio-Economic Situation

Kenya is the leading economy of East Africa and one of the largest economy in Sub-Saharan Africa Most
businesses are privately owned, with foreign investment supporting the agricultural and mining sectors.
Much of the country’s manufacturing revolves around food and beverages and the economy also benefits
from the port of Mombasa, which is a key transit point for imports into the east African region. Exporting
petroleum products to its east African neighbors from crude oil shipped into the country remains important,
in addition to agricultural products such as tea, coffee, fruits, vegetables and fresh flowers. Other important
exports include limestone, salt, fluorite/fluorspar and soda ash. Kenya also has deposits of gold and precious
stones.
Kenya’s wildlife attracts many visitors to the country’s national parks and game reserves. Its sandy beaches
and coral reefs are also a draw for foreign visitors. Tourism is therefore of key importance to the economy.
With a boom in mobile telecommunications, even among the poorest, Kenya is leading the way in
innovative mobile services such as telephone banking.
Because of its long history of attracting visitors, Kenya’s service industries—such as banks, hotels,
restaurants—are well-developed and outperform those of others in the region. The government hopes to
encourage the growth of new service industries (e.g. call centre operations).
The future success of the economy depends largely on a stable political situation and the curbing of
corruption and patronage, which limits the private sector’s willingness to invest in the country. Population
growth has also put a huge strain on Kenya’s land and the environmental impact of deforestation is
already being felt. But with better protection of the environment and a reduction in corruption and
mismanagement, Kenya’s trading culture, many entrepreneurs and strong industry sectors should foster a
favorable future.
Rural poverty in Kenya is also strongly linked to environmental concerns—especially poor water
management, soil erosion, declining soil fertility and land degradation. Climate change, which is one of
the major challenges facing the Kenyan economy, could undermine the resource base and contribute to
declining agricultural yields.
Although Kenya’s prospects for long-term growth are among the most favorable in East Africa, poverty
alleviation remains a challenge.
Kenya: At a Glance
Full name: The Republic of Kenya

Population: 45 million (2014 estimates)
Capital: Nairobi
Area: 582,000 km2
Major languages: Swahili, English
Major Towns: Mombasa, Kisumu, Nakuru, Eldoret, Nyeri.
Currency: Shilling
Time: GMT + 3 hours
20 BACKGROUND TO THE ENERGY SECTOR
The Government of Kenya (GoK) set forth, in its Vision 2030, a programme to transform Kenya into a “newly
industrializing, middle-income” country. Kenya’s energy generation falls into three main categories, namely
hydropower (45 per cent), thermal or conventional power (24 per cent) and other renewables (31 per cent).
It is estimated that Kenya’s installed power-generating capacity as of 2015 stood at 2,150 MW, to serve a
population of 45 million, which constrains economic growth (Oxford Business Group, 2015). The National
Energy and Petroleum Policy notes that the GoK proposes to raise the total installed capacity to 6,700 MW
by March 2016, however as noted above, the current capacity is significantly lower. (GoK, NEPP, 2015) p14.
3.1 Renewable Energy Potential in Kenya

Kenya is believed to possess more than 7,000 MW of undeveloped geothermal energy resources in the Rift
Valley. The NEPP notes that the government proposes to develop at least 1,900 MW by 2017 and 5,500 MW
by 2030. (GoK, NEPP, 2015) p13. Wind and biomass energy are also significant potential sources of power
generation. With the equator passing right through the middle of the country, the country has plenty of
solar insolation and the potential for solar energy in Kenya remains significant and untapped. The table
below provides an overview of renewable energy potential
Table 1: Renewable Energy Potential in Kenya (Ayieko, 2011)
No. Renewable Energy Potential Areas

1 Geothermal 7,000 MW Rift Valley
2 Solar 4-6 kWh/ m2/day 80% of the country
3 Wind 346 watts/ m2 Parts of Nairobi, east, NE and Coastal Kenya
4 Large Hydro 6,000 MW --
No. Renewable Energy Potential Areas

4 Small Hydro 3,000 MW Five drainage Basins
5 Biomass/Co-gen 300 MW Sugarcane belt
6 Other Biomass 300 MW --
In January 2015 the Ministry of Energy and Petroleum released an updated National Energy and Petroleum
Policy featuring a proposed new regulatory agency and coordination structure for upstream petroleum
production, coal, renewable energy and framework legislation on natural resources revenue management,
which will include the creation of a sovereign wealth fund. The Government of Kenya aims to create a
stable investment climate for private sector participation in energy, developing expanded transmission
and distribution networks to deliver power to customers, maintaining cost-reflective tariffs, and reducing
inefficiency in the sector to support more affordable end-user tariffs.
3.2 Key Actors – Kenya Energy Sector

The key public sector institutions involved with managing and regulating the energy sector in Kenya are:
Ministry of Energy and Petroleum (MOEP): www.energy.go.ke
Responsible for policy formulation including feed-in tarrifs and creating a framework for growth, investment
and sufficient operating capacity in the energy sector.
Energy Regulatory Commission (ERC): www.erc.go.ke
Responsible for the regulation of the energy sector. Established under the Energy Act of 2006, the ERC acts
as an independent regulatory authority with responsibility for economic and technical regulation of electric
power, renewable energy and downstream petroleum sub-sectors including tariff setting, review, licensing,
enforcement, dispute settlement and approval of power purchase and network service contracts.
Kenya Power and Lighting Company / (KPLC): www.kplc.co.ke
Wholesale buyer of electricity, obligated to buy electricity from all power generators including KenGen and
IPPs on the basis of negotiated power purchase agreements. KPLC is responsible for onward transmission of
purchased electricity and is the sole distributor of electricity from national grid to consumers in Kenya.
Kenya Electricity Generating Company (KenGen): http://www.kengen.co.ke/
KenGen manages all public power generation facilities and is the main generator of electricity in Kenya
which it sells on a wholesale basis to Kenya Power. KenGen has an installed capacity of a little over 1,500
MW which accounts for almost 70 per cent of the total installed capacity in the country including hydro,
geothermal, renewables and conventional power.
Geothermal Development Company (GDC): www.gdc.co.ke
This 100 per cent government-owned entity has the specific mandate to undertake all exploration and
development activities of geothermal activities in Kenya.
Kenya Electricity Transmission Company (KETRACO): www.ketraco.co.ke
Established in 2008 with the mandate to develop new high voltage electricity transmission infrastructure
to facilitate grid access to rural areas, allow for grid interconnection with new plants and enabling regional
power trading with neighboring countries.
Independent Power Purchasers (IPPs):
Private companies in the power sector dealing with either thermal (conventional) energy or renewable
energy sources under government’s feed in tariff policy. The IPPs collectively contribute to almost the
remainder of Kenya’s power generating capacity (see KenGen).
The other relevant actors relevant in the context of the NAMA are:
National Environmental Management Authority (NEMA)
NEMA is responsible for enforcement of environmental laws and regulations.
Centre for Energy Efficiency and Conservation (CEEC):
The Centre was established jointly by the GoK and the Kenya Association of Manufacturers to champion
energy efficiency and conservation efforts in Kenya.
3.3 Rural Electrification Authority (REA)

The Rural Electrification Authority was established under Section 66 of the Energy Act, 2006 as a corporate
entity under the Ministry of Energy and Petroleum (MOEP) with the mandate to accelerate the pace of rural
electrification in the country, a function which was previously undertaken by the MOEP. (See Section 9.2.3
for more information)
The REA has been identified as the key NAMA Implementing Entity (NIE) for the technical implementation of
the NAMA activities.
3.4 Analysis of Household Energy

Access to electricity is considered an important driver of economic growth. About 600 million people in
Sub-Saharan Africa—over two-thirds of the population—are without electricity. Most of these households
without electricity are thought to be off grid, or located too far away to connect to the national grid.
Currently there is limited evidence on the economics of rural electrification in Sub-Saharan Africa, however
studies have been initiated by the Government of Kenya, including one by the REA. Since 2006, the
REAhas been entrusted with the expansion of the national grid, installing electricity distribution lines and
transformers across many of the country’s rural areas. Despite this expansion in grid coverage, household
electrification rates in Kenya are estimated to be low. The draft National Energy and Petroleum Policy (NEPP)
states that as of June 2014, 32 per cent of Kenyans had access to electricity. A study commissioned by the
Ministry of Energy and Petroleum in 2014 established that Kenya has one of the highest connection charges,
contributing to low access to electricity supply. (GoK, NEPP, 2015) (p81).
Despite the successful electrification of public facilities in rural areas, most rural households remain
unconnected. The NEPP states that “…for the socio-economic transformation of the country, the
Government has set a goal of 70% and universal access to electricity by 2017 and 2020, respectively.
Electricity alone is not sufficient to spur economic growth, but it is certainly necessary. Access to electricity
is particularly crucial to human development, as certain basic activities—such as lighting, refrigeration,
running household appliances, and operating equipment—cannot easily be carried out by other forms of
energy. Sustainable provision of electricity can free large amounts of time and labour and promote better
health and education.” The NEPP goes on to state that “going by the current pace at which connections are
being effected, the achievement of 70% universal access to electricity by 2020, will not be possible without a
paradigm shift in the electrification strategy” (GoK, NEPP, 2015) (pp83-84).
Despite the impressive goals, The GoK faces several challenges in improving electricity generation and
distribution to meet increasing energy demand. Some of the major challenges include:
■ Connecting several thousand new consumers per year to the electricity grid, including expansion of the
Rural Electrification Programme;
■ Reducing the cost of electricity production in Kenya, which is higher than the costs of regional
economic competitors such as South Africa;
■ Investing in upgrading of the national electricity grid to provide constant high quality power, especially
to industrial consumers;
■ High consumer tariffs due to operational inefficiencies and high taxes.
3.5 Current Fuel Use in Households

Kerosene as a cooking and lighting fuel is important for the poor in rural and urban areas and has in
some cases served as a substitute for wood fuel. Hence, any efforts to increase kerosene consumption will
undoubtedly relieve pressure on wood use. Indeed, the government has often used tax reductions (or zero
increases) for kerosene for this purpose and also as a poverty mitigation measure. Key emerging concerns in
this regard are the impact of kerosene on the levels of indoor air pollution, the consequent health impacts
on the poor, and the adulteration of other fuels with kerosene.
Wood fuel has remained the most important source of energy in Kenya, meeting over 70 per cent of the
country’s total energy consumption needs. As the primary source of fuel for rural households, use of wood
fuels has a major impact on the sustainable development of Kenya. The lack of efforts with reforestation,
unsustainable harvesting, and on-farm planting of wood lots, have often led to soil degradation and
deforestation.
About half Kenyan households use charcoal. Some 80 per cent of urban households use the fuel compared
with around 30 per cent of households in rural areas. Charcoal continues to be harvested from trust lands
and gazetted forests, and efforts to introduce improved charcoal production technology have had minimal
impact on recovery and production due to increasing demand. Some of the charcoal in Kenya is dubbed
environmentally friendly and exported, but accurate figures are unavailable.
The Constitution calls for efforts to increase tree cover to 10 per cent of Kenya’s total surface area. The total
forest cover for Kenya, is estimated at only 2-7 per cent depending on the source of information. Kenya has
3.467 million ha of forest cover which is equivalent to 5.9 per cent of the land area, out of which 1.417 million
ha comprises indigenous closed canopy forests, mangroves and plantations. The Kenya Forest Service
has estimated that in 2009 annual wood demand in Kenya stood at 37 million m3, while the estimated
sustainable wood supply was only 30 million m3. (Kenya_Forest_Service, 2009) pp. 9,10
This wood deficit of 7 million m3 does not bode well for efforts to increase Kenya’s forest cover, unless
supply (plantings) can be increased ordemand (wood use) can be reduced through actions and technologies
like the improved cookstove initiatives. An important and fundamental co-benefit of improved cookstoves
programmes is the reduction of wood use for fuels and a corresponding contribution to improving Kenya’s
current deficit in wood balance.
3.6 Use of Improved Cookstoves in Kenya

The use of improved cookstoves (ICS) in Kenya is not a new phenomenon. Production of rudimentary cookstoves
has taken place perhaps as early as the early 1980s. A study conducted by Global Village Energy Partnership
(GVEP) International, a non-profit organization in 2012 estimates that between 2.5 and 3 million Kenyan
households use some form of improved cookstoves. Imported stoves from Envirofit and the Kenyan Jiko Poa,
Upesi, Uhai, and Rocket stoves have been in the Kenyan market since 2010. The cost in 2012 ranged from US$6-
20. Currently, less than 37 per cent of households in Kenya use a form of improved cookstove (ICS) while the rest
use cooking devices with low thermal energy efficiency ratios and high negative health impacts associated with
indoor air pollution. (GVEP-GACC, 2012) p35. Most of the ICS in Kenya fall below ‘tier 2’ category as defined by the
Global Alliance for Clean Cookstoves (GACC) demonstrating significant margins for improvement. As one might
expect, use of wood and kerosene tends to decline with rises in income whilst use of LPG, electricity and biogas
increases with higher income levels, especially in urban areas (GVEP-GACC, 2012) p40-48.
In short, the need for improved cookstoves in Kenya is widely recognized and acknowledged by Kenyan
government policy documents, as well as international NGOs and donor organizations.
3.7 Solar PV Lighting in Kenya

Solar PV lighting and lantern programmes have also been introduced in Kenya inthe recent past. Kerosene-
based lighting continues to be the leading source of illumination at the household level. An average
household uses a significant portion of its income on kerosene fuel, kerosene use contributes to greenhouse
gas emissions, and the air particulate emissions generated by the use of kerosene lamps further contribute
to household air pollution. The government, regulators and development agencies have for several years
been on the forefront of advocating for a swift transition from kerosene use for lighting to other modern and
renewable energy sources including solar lanterns.
Solar lanterns are often discussed within the context of solar home systems (SHS) which comprises solar
lighting with or without additional facilities for mobile charging, radio etc. The country has one of the
most mature and dynamic commercial photovoltaic (PV) markets in Africa. This is driven by relatively high
consumer awareness of the solar products and sustainable consumer demand from a relatively prosperous
non-electrified rural population. A distribution chain has developed that is effective in supplying and
installing solar home systems and institutional systems throughout the country. Work on the development
of the solar lantern has generated a considerable amount of interest amongst potential customers,
importers, distributers and manufacturers alike.
Kenya’s National Climate Change Action Plan designates improved cook stoves and solar lanterns as one of
the country’s six top Priority Mitigation Programmes (GoK, NCCAP, 2013) (p79), identifies the promotion of
improved cookstoves as a priority intervention in climate change, and recognizes the considerable social,
economic, and healthcare related co-benefits associated with improved cookstoves and solar lanterns,
especially for women and children.
3.8 Barriers to Adoption of Clean Energy Technologies

The World Bank-IFC Lighting Africa Progress Report in 2010 noted that there were over 70 solar lighting
products produced by more than 50 companies available in Africa at prices ranging from US$25-$50.
Nonetheless, the World Bank also found that providing better financial mechanisms, for both producer
and the consumer, is essential for continued market penetration. A lack of financing options is a significant
barrier to the growth of solar lighting and technologies in Africa (World Bank-Lighting Africa, 2010) (p23).
The same report found that lack of consumer education, the need for product quality assurances, and the
lack of monitoring and evaluation processes also pose formidable barriers (World Bank-Lighting Africa, 2010)
p26-29. The World Bank report also highlights the socio-economic co-benefits it has witnessed through the
Lighting Africa programme, including: improved lighting quality for households; increased school retention
and improved grades for children; increased income levels for small and medium businesses (SMEs); and
reduced GHG emissions (World Bank-Lighting Africa, 2010) (p24).
In Kenya, Solar Aid through Sunny Money in April 2014 claimed sales of 183,000 solar lanterns in Kenya.
M-Kopa, a company with an established presence in East Africa currently pursues a lease based model for
the distribution its solar lanterns, disseminated over 50,000 solar home systems by 2013 in Kenya alone.
While it is estimated that ICS account for almost one third of national sales figures, the quality of ICSs has
not been up to the mark. Transformational change is necessary in implementing large scale adoption
programmes for ICS and solar lanterns in Kenya. While there have been multiple unilateral and multilateral
efforts by various official donors and NGOs over the past two decades to introduce new cook stove
technologies, uptake has been slow.
A 2012 review of Household Clean Energy Technologies in Kenya and Tanzania by the African Biodiversity
Collaborative Group, USAID, and GVEP concluded that the lack of financing for both the consumer and the
entrepreneur was a major constraint to widespread adaptation, as well as lack of skilled technicians and
maintenance facilities, lack of production standards and quality control, cultural reluctance to change from
traditional ‘three stone’ cooking methods, and reticence on the part of lending instructions due to small
loan amounts, high transaction costs, and lack of qualified banking personnel to assess consumer loans for
household technologies. Outright grant programmes were also found to be ineffective. (GVEP-USAID, 2012)
In short, larger scale introductions of solar lanterns and ICS need to be supported by adequate consumer
and producer financial mechanisms, maintenance and warranty facilities, adequate quality control
certifications at the national and county levels, and customer service and training facilities, without which
the programme will not be sustainable. The NAMA aims to tackle several of these challenges through its
market based approach.
3.9 Key Drivers for Market based Approach

The NAMA identifies 5 “drivers of change” that can support transformational change in driving forward a
market driven model for promoting clean energy technologies, namely:
■ Market Intelligence: By lowering entry barriers into the market and helping inform the design of
appropriate products for the African market while providing periodic insights and trends to support
decision-making processes.
■ Quality Assurance: By establishing quality specifications to promote quality clean energy technologies
that reduce market “spoilage”.
■ Access to Finance and After Sales: Support members of the value chain (manufacturers, distributors,
retailers, and end-consumers) to access easy financing and ensuring longevity of the product, thus
building the confidence of financing agencies.
■ Marketing and Awareness Creation: Generate demand for clean energy technologies and associated
services by educating, informing and raising awareness.
■ Policy Environment: Engaging the government to create a favorable environment for the private
sector to participate in the value chain.
28 THE POLICY ENVIRONMENT IN KENYA
Kenyan national policies have undergone some significant developments in the wake of the new 2010
Constitution and the 2013 presidential elections. The new Constitution, for the first time, shares power
through “devolution” and through its Bill of Rights assures Kenyans’ access to essential economic, social,
and environment rights. The Constitution and these new government policies have direct relevance to
this proposed Clean Energy NAMA in several critical areas, especially since significant integration and
implementation activities for this NAMA will take place at both the national the county levels. Without
careful alignment of the NAMA with current government policies, the NAMA will not attract the requisite
government and political support to be sustainable and successful. Nor will the NAMA be successful if it
does not contribute to meeting the expectations of Kenya’s citizens and stakeholders.
This next section briefly and broadly reviews specific government policies concerning the NAMA and can be
broadly divided into two categories, the Constitution, Vision 2030 and the SMTP forming the high-level long-
term strategic outlook and the NCCAP, NEPP and other sister initiatives providing the sector specific focus
4.1 Constitution of Kenya

The new Constitution of Kenya, approved by the public in 2010, is the legal foundation of the government’s
authority and legitimacy and guarantees (promises) a clean and healthy environment (Articles 42, 69, and
70), which is of direct relevance to this NAMA in terms of household air pollution. Also included in the
Constitution is a goal of reaching 10 per cent forest cover for the nation (Article 69), relevant for wood use
for fuels and the sustainable wood balance in Kenya. The Constitution guarantees public’s right to access
to healthcare, housing, freedom from hunger, clean and safe water, social security, access to information,
and education (Article 43). The Constitution also defines the distribution of functions between the national
and county governments (Fourth Schedule) which implies that the county governments will become major
stakeholders and participants in this NAMA. Mitigation of GHG emissions and improvements in noise, air
and healthcare related pollutants resulting from wood burning for cooking and lighting are also guaranteed
under articles 42, 69, and 70 in protection of the environment (GoK_Constitution, 2010)
County government functions are detailed in the Constitution under its Fourth Schedule. Of special
importance to this NAMA are the transfer of powers to the county for control of air and noise pollution and
healthcare delivery. County government functions of significance to this NAMA include, among others:
■ Control of air and noise Pollution, public nuisances; and
■ Trade development, licensing, fair trade practices, Cooperative Societies
Constitution—Clean Energy NAMA Relevance
The proposed Clean Energy NAMA directly addresses multiple articles under the Constitution’s
Bill of Rights in the form of indirect economic-social-environmental co-benefits associated with
healthcare related particulate emissions and a clean and healthy environment (Articles 42,69, and
70). This Clean Energy NAMA also directly addresses Article 69 aspirations to achieve a national 10
per cent forest cover by reducing the amount of wood required, and reducing wood demand, for
cooking though higher efficiency cook stoves.
A principal objective and resulting requirement of this Clean Energy NAMA is to ensure full
integration of County Governments. County Governments will be actively involved in trade
development, licensing, taxation, and environmental and pollution administration and
enforcement.
4.2 Vision 2030

Kenya’s Vision 2030 is the national long-term development blueprint for Kenya that is implemented through
a series of five-year development plans—the current being the Second Medium Term Plan (SMTP) 2013-
2017. Vision 2030 aims to transform Kenya into a newly industrializing “middle-income country providing a
high quality of life to all its citizens by 2030”. Vision 2030 is a living document that was first published in 2007
and is currently updated periodically in a web-hosted version. (GoK_Vision 2030, 2007) (p1).
Promoting the development of an indigenous clean cookstove and solar PV industry in Kenya, especially
in rural areas, is seen as a concrete contribution to fulfilling Vision 2030’s goal of increasing national GDP
growth to 10 per cent per annum by 2030 as well as providing enhanced equity and wealth creation
opportunities for the poor through creation of meaningful employment in rural areas. By implementing
manufacturing and distribution centers under this NAMA, improvements in trade promotion, licensing,
poverty reduction and human resource development are anticipated. This Clean Energy NAMA also supports
creation of an increasingly clean, secure and sustainable environment by reducing household air pollution
through reductions in the amount of wood burning and directly addresses Vision 2030’s stated concern that
poor air quality due to wood reliance leads to upper respiratory infections.
Vision 2030—Clean Energy NAMA Relevance
This Clean Energy NAMA directly supports the Vision 2030 goal of reaching 10 per cent GDP growth
by 2030 through the development of an indigenous cook stove and solar lighting industries in
rural areas and the resulting creation of employment opportunities for the rural poor, especially
women and youth. It further secures a clean and safe environment through mitigating one of the
leading causes of mortality in Kenya—household air pollution. Finally, it will improve public sector
efficiency, help remove trade and investment barriers, streamline licensing, and lead to enhanced
equity and to poverty reductions, especially for women and youth.
4.3 The Second Medium Term Plan (SMTP)

The Second Medium Term Plan (SMTP) 2013-2017 is the new administration’s five-year plan which
prioritizes, among other goals, the country’s rapid economic transformation and growth through
infrastructure development, maintaining a stable economic environment, promoting diversification and
a greater contribution from manufacturing, and paying full attention to securing the environment and
building resilience to climate change (GoK_SMTP, 2012)
The SMTP identifies alignment with the UN’s Sustainable Development Goals (SDGs) as a priority, including
achieving development without ruining the environment, reducing extreme poverty, achieving health and
wellbeing for all ages, curbing human-induced climate change with sustainable energy, and improving
governance and aligning business behavior with all SDG goals. This Clean Energy NAMA supports reductions
in poverty through job creation especially for women and youth in rural areas, and helps align county
government and business practices with the SDG goals in the planned small and large Energy Economic
Production Zones (EPZs) discussed later in the NAMA. The development of the EPZs in mostly rural areas
under the NAMA will support the capacity development and improved alignment of county and local
governments in terms of trade development; taxes, licensing, and environmental regulations.
The SMTP also calls for full attention to the environment, building resilience to climate change, and increasing the
share of energy generated from renewable energy sources is directly addressed under the Clean Energy NAMA.
Replacing the widespread use of kerosene lanterns through an indigenous, “made-in-Kenya,” array of solar
lantern production and distribution centers, will begin to make a significant reduction in kerosene use,
resulting in reductions in particulate household air pollution, and serve as a transformational approach to
increase solar renewable energy use, especially in rural, off- grid, locations in Kenya.
SMTP—Clean Energy NAMA Relevance
This Clean Energy NAMA directly supports the government’s Second Medium Term Plan for sustainable
economic and social development by 2030, while protecting the environment. The NAMA directly
addresses increases in renewable energy through solar lighting, reduction of healthcare related
household air pollution and Kenya’s leading cause of death creation of jobs and employment for women
and youth in rural areas; capacity development and integration with local governments on business and
investment opportunities, reductions in GHG emissions arising from inefficient wood-based cooking
fuels, and improvement in the wood balance and forest cover through reductions in wood fuel use.
4.4 National Climate Change Action Plan (NCCAP)

The National Climate Change Action Plan (NCCAP) 2013-2017 is Kenya’s first Action Plan on climate change. It
has been developed with the aim of implementing the National Climate Change Response Strategy (NCCRS) that
was launched in 2010. It is an extensive 268-page blueprint addressing Kenya’s priorities and responses to climate
change mitigation and adaptation. One of the major contributions the NCCAP makes is defining Kenya’s national
GHG mitigation goals: Kenya hopes to reduce GHG emissions to 15 per cent below 2010 levels by the year 2015 and
to 70 per cent by 2030; a quite ambitious target (GoK_NCCAP, 2012) (pg 27). This Clean Energy NAMA helps reduce
GHG emissions by reducing the amount of wood fuels utilized in inefficient cook stoves and will further reduce GHG
emissions by substituting solar PV lighting for the widespread practice of using kerosene for this purpose.
It is estimated by the NCCAP that up to 5.6 million tCO2e (ton CO2 equivalent) can be saved annually by
2030 through a sustainable program to introduce improved cookstoves and alternative fuels and up to 1.5M
mtCO2e annually by 2030 through the use of solar lighting and household solar PV systems. (GoK_NCCAP,
2012) (p 68). It should be noted that this Clean Energy NAMA implements transformational change in these
two areas by introducing an indigenous, “made-in-Kenya,” structure of up to eight cookstove and solar
lighting production facilities and up to 20 distribution points around the country. This is designed to insure
consistent and sustainable introduction and use of these, and other, renewable energy and higher efficiency
technologies by 2030. Improved cookstoves and solar lanterns are included in the six Priority Mitigation
Programmes in the NCCAP and are identified as priority interventions (GoK_NCCAP, 2012) (p 79).
Finally, the Clean Energy NAMA will support three additional priority programmes under the NCCAP: provide
capacity development in the areas of national GHG inventories; measurement, reporting, and verification
(MRV) of GHG emissions; and introduce transformational change in climate change finance options
by introducing new financial instruments and opportunities. In climate finance, the NCCAP identifies
development of (international and private) partner funding for key priorities, improving the regulatory and
policy framework for low carbon investments, and establishing a platform for engagement between the
Kenyan government and investors as priority action programmes (GoK_NCCAP, 2012) (p 93).
The NCCAP establishes broad national GHG emission reduction goals, estimates potential GHG emission
reductions for both the improved cookstove and solar lighting programmes, and identifies both of these
programmes as national priorities or implementation plans.
NCCAP—Clean Energy NAMA Relevance
This Clean Energy NAMA directly supports the government’s first and most comprehensive National
Climate Change Action Plan in reducing national GHG emissions by 15 per cent on 2010 levels by
2015 and up to 70 per cent by 2030. The NCCAP estimates that up to 5.6M mtCO2e mitigation
can occur through sustainable introductions of improved cookstoves and up to 1.5M mtCO2e
mitigation can result from the sustainable introduction of solar lighting. This NAMA proposal
promotes the transformational implementation of these programmes.
The economic-social-environmental benefits called for by the NCCAP and derived from this
proposed NAMA are outlined in detail above and throughout this document. Promotion of
alternative fuels and renewable energy, creation of Green Jobs and employment for women and
youth, capacity development in GHG inventories, MRV, and climate change finance are only a few
directly related, yet significantly important, co-benefits resulting from approval of this Clean Energy
Cookstove and Solar Lighting NAMA.
4.5 National Energy and Petroleum Policy

The National Energy and Petroleum Policy (NEPP) draft stipulates that Kenya’s overall energy and petroleum
policy is to ensure affordable, competitive, sustainable and reliable supply of energy to meet national and
county development needs at least cost, while protecting and conserving the environment. The NEPP draft
is the culmination of efforts, begun with Sessional Paper No. 4 of 2004, the Energy Act 2006, and subsequent
sector laws, by-laws and regulations, other policies, administrative procedures, government guidelines
and circulars relating to energy since then. The NEPP addresses national energy (electricity) production,
transmission, and distribution issues, as well as providing two short chapters on biomass (chap. 3.5) and
solar energy (chap. 3.7). (GoK_NEP, 2014)
The NEPP addresses the national wood balance, forest cover, wood supply, and wood demand, noting
that firewood and charcoal supply 69 per cent of Kenya’s total energy consumption; 55 per cent from farm
residues and 45 per cent from forests. There is a huge gap between the nation’s existing tree cover and the
constitutional requirement for 10 per cent tree cover. The NEP identifies the country’s unsustainable use of
biomass, the widening gap between wood supply and demand, emissions from wood fuels, and inadequate
alternative clean energy sources as major challenges.
In solar energy, the NEPP notes that Kenya has a large-scale market-driven penetration of small solar PV
systems (12-50 watts) and that by 2014 an estimated 6MW of solar power has been installed. By December
2013, a total of 977 schools and health facilities had benefitted from government-sponsored efforts to install
solar PV lighting systems (p. 57). The NEPP calls for government efforts to provide incentives to promote
local production of efficient solar systems, install solar PV systems on all remaining off-grid public facilities,
and procure and distribute solar lanterns on a national scale (p. 58).
The NEPP also finds that the burning of wood fuels and solid fuels leads to serious health- related concerns,
including increased indoor air pollution which leads to Upper Respiratory Tract Infections, and that there is a
need to move consumers from the consumption of kerosene to efficient renewable energy solutions (p. 95).
This Clean Energy NAMA directly addresses many of the concerns and calls for action contained in the NEPP,
including reduction in demand for wood cooking fuels, reduction in indoor household air pollution, and
an increasing fuel switch from the use of kerosene lights to solar PV lanterns, all consistent with this new
national energy policy.
NEPP—Clean Energy NAMA Relevance
This Clean NAMA directly supports the government’s draft National Energy Policy though e
reductions of wood use, decreases in household air pollution and subsequent reduction in health-
related upper respiratory infections, and the substitution of kerosene with solar power lighting. The
NEPP notes that both of these programmes have been introduced and are well received in Kenya,
though far from comprehensive or sustainable at the present.
4.6 Other Programmes

Sustainable Energy for ALL (SE4All) Investment Prospectus is a Ministry of Energy and Petroleum
supported documented published with the participation of several official donor and development agencies
including the EU, BizClim, ACP, the United Nations Development Program, NEPAD, and SE4All-Kenya. Its
principal objective is to further the development of renewable and sustainable energy in Kenya. SE4All calls
for universal access to modern energy, doubling the amount of renewable energy, and doubling energy
efficiency in Kenya by 2030.
Global Alliance for Clean Cookstoves (GACC) is working with the Clean Cookstoves Association of Kenya
(CCAK), with Kenya’s Ministry of Environment, Water, and Natural Resources, and with the Ministry of Health
to promote the adoption of clean cookstoves and fuels among 5 million households by 2020.
Clean Cookstove Association in Kenya (CCAK) is an NGO working with the World Bank supported Global
Alliance for Clean Cookstoves. The mission of the CCAK is to facilitate innovations in design, testing,
production, marketing, and use of clean cookstoves and fuels through improved government policies,
increased public awareness, and capacity development. In the context of the NAMA, the CCAK target of 5
Million cookstoves was noted as the NAMA target during the stakeholder meetings.
Collectively, between the above GACC, the CCAK, other NGO’s, private industry, and the Ministry of Energy
and Petroleum resources, it is estimated that between 1.5–3.5 million improved cookstoves have now been
deployed in Kenya, though most of these are still at the Tier 1, most basic, efficiency level. The pioneering
efforts of these organizations in building public awareness and acceptance of improved cookstoves fits
well with this NAMA’s Clean Energy cookstoves and solar lighting objectives, enhancing the chances of
sustainable success.
4.7 Summary and Conclusion

In conclusion, it should be clear from the above national and sectoral policy reviews, that multiple Kenyan
national policy documents, from the Constitution, Vision 2030, the Second Medium Term Plan, the National
Climate Change Action Plan, and the National Energy and Petroleum Policy, down to various sub-sectors,
NGOs and private industry levels, that Kenyan government and public recognition of the need for such
programmes has been established.
This NAMA focuses on transformational changes in the manufacturing, distribution, and capacity
development sectors of the Kenyan national economy so that the Clean Energy NAMA becomes widespread,
supportable, accessible to the poor, and sustainable going forward. The table below summarizes the key
policies discussed in the section above and their alignment with two objectives of the NAMA: (Section 2.4)
NAMA Objective 1 NAMA Objective 2 Common Objectives

National Policies Enable private sector Consumer Finance
participation Model
Constitution Clean environment Access to information Economic- social rights
Economic-social rights Economic-social rights Devolution to County

Government
Articles 42, 43, 69, 70 Articles 35, 42, 43
Article 43, 70 Fourth
Schedule
Vision 2030 Achieve 10 per cent annual Diversification and Full economic and
Second Medium GDP growth through deepening of capital functional integration
Term Plan (SMTP) infrastructure development. markets of County Governments
through devolution
Increase productivity, access Capital markets
to work, commercial, financial infrastructure and Prioritize job creation
centres, and essential services institutions especially for youth and
women
Improve distribution of goods Access to finance for
and services SMEs
National Climate Reduce GHG cookstove Financing NCCAP Develop cooperative
Change Action emissions by 5.6M mtCO2e; Implementation partnerships to engage
Plan (NCCAP) 1.5M mtCO2e solar lighting government and civil
emissions by 2030 Improving Financial society
Absorptive Capacity
Capacity development in and Engagement with Develop effective social
GHG and MRV actions Investors mobilization network
(Chapter 10)
Improved cook stoves and Improve Regulatory &
solar lanterns as Priority Policy Framework for
Mitigations Climate Action related
Investments
National Energy Promote local production of Finance, investment, Improve management,
& Petroleum solar systems, reduce wood incentives reform coordination, and
Policy (draft) fuel emissions as health integration of energy
hazard, replace kerosene with related planning
solar lighting
Sector and Other GACC/CCAK target of 5 Financial products, Promote public
Policies million improved clean incentives awareness and
cookstoves by 2020 understanding of
Public-Private renewable energy and
Create large wholesale and Partnership Act (2012) clean cookstoves
distribution networks (GACC)
36 NAMA BASELINE INFORMATION
The baseline scenario consists of two components, a Figure 3: Map of Kenya showing Population
GHG emission reduction baseline and a Sustainable Density
Development (SD) baseline. Setting the baseline
scenario allows the impacts due to the NAMA
interventions to be properly assessed and quantified
through the monitoring activities described in the
Measurement, Reporting and Verification (MRV)
system.
5.1 The NAMA Boundary

The geographical boundary of the NAMA covers the
whole of Kenya but it focuses on rural communities
and is targeted at the entire rural population with
its various economic needs. The groups defined
by these needs have different consumption levels
and different levels of ability to pay for goods Source: (SEDAC, 2000)
and services. The proposed intervention under
this NAMA will make sure that the right services
are made available to the different user groups
according to an appropriate pricing model.
5.2 GHG Emission Reduction Baseline
5.2.1 Kenya: Access to Energy
The baseline scenario of the NAMA is the hypothetical scenario describing what will happen in the
absence of the proposed NAMA interventions. The national statistics on “Household Source of Lighting Fuel
by County and District” and “Household Source of Cooking Fuel by County and District” provide an overview
of the current sources of energy for lighting and cooking respectively by county and districts.
Table 2: Number of Households by Fuel type for Lighting and Cooking in Kenya (KNBS, 2009)
Household Source of Lighting Fuel Household Source of Cooking Fuel

(Kenya Total) (Kenya Total)
Source of No. of % of Total Source of No. of % of Total
Energy Households Households Energy Households Households
Electricity 1,989,730 22.69 Electricity 70,433 0.80
Pressure Lamp 52,240 0.60 Paraffin 1,014,446 11.57
Lantern 2,670,397 30.46 LPG 43,8381 5.00
Tin Lamp 3,373,126 38.47 Biogas 63,356 0.72
Gas Lamp 84,375 0.96 Firewood 5,666,216 64.62
Fuel Wood 396,062 4.52 Charcoal 1,483,901 16.92
Solar 142,273 1.62 Solar 4,469 0.05
Others 59,751 0.68 Others 26,752 0.31
Total 8,767,954 100.00 Total 8,767,954 100.00
As can be inferred from the data, 70 per cent of the households use fossil- fuel- based lamps (kerosene,
paraffin etc.) as the primary source of lighting and more than 80 per cent of the households in Kenya are
dependent on either firewood or charcoal as the primary source of cooking fuel. Therefore, the baseline for
this NAMA assumes a continuation of the situation should the interventions fail to occur.
5.2.2 Identified Approach for Determining GHG Emission Reduction
The GHG emission reduction achieved by the NAMA intervention will be determined as the difference
between the baseline emissions and the NAMA intervention emissions. As the basis for the calculation the
following approved small-scale Clean Development Mechanism (CDM) methodologies have been reviewed:
■ Solar PV power plants at EPZs: CDM Methodology AMS-I.A: Electricity generation by the user
■ Solar PV lanterns: CDM Methodology AMS-III.AR: Substituting fossil fuel based lighting with LED/CFL
lighting systems
■ ICS: CDM Methodology AMS-II.G: Energy efficiency measures in thermal applications of non-renewable
biomass
The approaches presented in the methodologies have been simplified where appropriate to accommodate
the overall objectives and requirements of the NAMA.
Baseline for Solar PV Power Plant:
The CDM Methodology AMS-I.A. is applicable for measures related to providing power from renewable
energy sources to individual households and users who had no national or regional grid connection before
the project. In fact AMS I.A. is applicable for a broad range of technologies including solar, hydro, wind,
biomass gasification and other technologies that produce electricity, all of which is used on-site/locally by
the user, e.g. solar home systems, wind battery chargers. Based on the methodology, the baseline emissions
are calculated as power consumption multiplied by an emission factor (tCO2e/MWh). For the emission
factor, a default value of 0.8 tCO2e/MWh, which is derived from diesel generation units, is used.
Baseline Scenario for Solar PV Lanterns:
The baseline scenario of this Project is foreseen as the use of kerosene lamps to supply light in the absence
of the project activity. Therefore, the baseline emission level is the amount of greenhouse gas emitted from
kerosene lamps when lighting source displaced by solar energy. The methodology AMS III.A.R provides
guiding principles which are well-suited for PV-based LED lighting projects and reducing the time and cost
of qualifying a project and documenting the carbon savings, while requiring performance disclosure and
embedding new criterion for minimum product quality while rewarding those products that exceed these
minimums. <unclear sentence>In most cases, independent testing is required in order to demonstrate
performance. Based on the minimum performance criteria specified in the new approved methodology,
the estimated savings would be appropriately modest: 0.16 tonnes of CO2 per lamp (over a 2-year deemed
service life).
Baseline Scenario for Improved Cookstoves:
Between 1990 and 2005, Kenya lost roughly 12,050 hectares of forest cover per year. This translates into a
rate of deforestation of 0.32 per cent per year. Of the wood used in 2005, 100 per cent came from forests. The
wood was used either as industrial wood or as fuel. In 2005, 1.6 million m3 was harvested for industrial wood
and 27.4 million m3 was used as fuelwood. In summary 94 per cent of wood removal in 2005 was to be used
as fuel and all of it came from forests. Since forest cover has been decreasing steadily since 1990 it can be
concluded that non-renewable biomass has been used in Kenya since 1989 and is the baseline scenario in
line with methodology AMS II.G.
Summary:
From the analysis of the 3 CDM methodologies, the baseline scenario for the three technical interventions
under the NAMA are as follows:
■ Solar PV power plant in EPZs: Diesel generator systems
■ Solar PV based lanterns: Use of fossil fuel (i.e. kerosene)
■ Improved Cookstoves (ICS): Use of less efficient stoves burning non-renewable biomass/charcoal
5.3 Sustainable Development Baseline
5.3.1 Kenya Status – MDG
Having incorporated the Millennium Development Goals (MDGs) into Vision 2030, Kenya was better
prepared than many African countries to implement the MDGs and make a seamless transition into the post-
2015 era. Data from the Millennium Development Goals - Status Report 2013by the Ministry of Devolution
and Planning are summarized in the table below for some of the key indicators:
Table 3: Kenya MDG Progress Snapshot (MoDP, 2013)
MDG Goal Target 2015 Target 2009 Comment

Value
Goal 1 Halve the population below 21.7% 45.2% Progress has been
poverty line (in the period difficult
1990-2015)
Poverty Gap Ratio 9.6% 12.2% Marked improvement
between 2005 and 2009
Goal 2 Net enrolment in primary 100% 96% Significant progress
education
Literacy rates (15-24 age group) 100% 80.3% Significant progress
from 58% in 2005
Goal 3 Ratio of girls to boys in primary 1 0.98 Gender parity has been
historically high
Share of women in non- 50% 35.9% Steady progress from
agricultural wage employment 29.5% in 2000
Goal 4 Child mortality under 5 32/1000 74/1000 While mortality rates
have declined since
Infant mortality 22/1000 52/1000
1990s, there remain
several challenges
Goal 5 Maternal mortality 147/1000 488/1000 The figures remain high
and have not fallen
significantly from 590 in
2000
Proportion of births attended 90% 46% Minimal progress
by skilled health personnel
Goal 6 Proportion of population with 80% 42.5% Inconsistent progress
(2013) from 3% in 2003 rising
advanced HIV infection with up 78% in 2009 and
access to antiretroviral drugs dropping to 42.5% in
2013
MDG Goal Target 2015 Target 2009 Comment

Value
Goal 7 Proportion of land area covered 10% 6.4% Steady increase from 6%
by forest in 2000 to 7% in 2013
Proportion of population using 78% 52.6% Insufficient progress
an
improved drinking Water

source
Proportion of population using 77% 61.1% Insufficient progress
an
improved sanitation facility

Goal 8 Proportion of total country 100% 98.6% Significant success
imports to Kenya admitted
duty free
While significant progress has been made on Goals 2 and 3 on education and women’s empowerment,
infant and maternal mortality ratios remain high. The forest cover in Kenya has shown an upward trend but
there has been a lack of sufficient progress on access to safe drinking water and sanitation, indicating that
Kenya has been successful in achieving certain targets while progress on others has been slow. The NAMA
has the potential to contribute to several of the MDG targets under the new post 2015 SDG indicators as
summarized by the SD Tool below.
5.3.2 The SD Tool
The Sustainable Development (SD) indicators were selected based on the Sustainable Development
Evaluation Tool (SD Tool) provided by UNDP. The SD Tool defines 5 different SD domains: (UNDP_SDT, 2014)
■ Environment
■ Social
■ Growth and Development
■ Economic
■ Institutional
The tool requires for each of the interventions that it be decided which indicator (such as air pollution, job
creation, health, etc.) is selected, the potential impact be identified, an explanation on the chosen indicator
be added, the effect (positive, negative, both) be defined and that it be indicated whether monitoring
is done. The NAMA interventions will contribute to improvement of various sustainable development
indicators as shown in the table below:
Table 4: The SD Tool and the indicators relevant to the NAMA
Domain Indicator Measured under NAMA Contribution

(Yes/No) to specific SDG
and targets
Air pollution/quality No
Water pollution/quality No
Environment
Soil pollution/quality No
Others (Noise/visibility) No
Biodiversity and Ecosystem balance No
Climate change adaptation and Yes—GHG Emission Reduction Goal 13
mitigation
Health No
Livelihood of poor, poverty Yes Goal 1.4
alleviation, peace
Total no. of ICS/PV lanterns
distributed to the ‘poorest of
poor’
Affordability of electricity No
Access to sanitation and clean No
drinking water
Social
Food security (Access to land and No

sustainable agriculture)
Quality of employment Yes Goal 8.3
Total no. of EPZs established

through loans/grants etc.
Time savings/time availability due to No
project
No child labour No
Domain Indicator Measured under NAMA Contribution

(Yes/No) to specific SDG
and targets
Access to clean and sustainable Yes Goal 7.1

energy
Total no. of lanterns / ICS
distributed
Education No
Empowerment of women Yes Goal 5.5
Growth and Development
Total no. of women employed

Access to sustainable technology Yes Goal 9.5a
Total capacity of Solar PV power

plant installed
Energy security No
Capacity development Yes Goal 4.4
Total no. of training and capacity

development programmes
Equality (quality of jobs given, job No
conditions for men/women)
Income generation/expenditure No
reduction/balance of payments
Asset accumulation and investments Yes Goal 9.3
Economic
Total no. of enterprises by type

of EPZ Model (i.e. manufacturing,
distribution etc.)
Job Creation (number of men and Yes Goal 8.3
women employed)
Total no. of new employment
created through EPZs
Policy and planning Yes Goal 16.6
NAMA Coordinating and

Institutional
implementing entities mandated

for NAMA
Laws and regulation Yes Goals 17.1
Total grants/loans and country

contribution for the NAMA
5.4 NAMA Target

Note: This section must be read in conjunction with Chapter 7 on Technical Interventions.
While the NAMA supports Kenya’s various policy targets on improving access to energy, increasing private
sector involvement and capacity development, the specific NAMA targets need to be set in a way that they can
be aligned to specific SD indicators from the SD Tool. The NAMA targets (values) are defined in the table below:
Table 5: NAMA targets for various indicators as shortlisted using the SD Tool
Domain Parameters Baseline Target Value

Value (estimated ex-ante)
Environment GHG Emission Reduction Refer to 6.17 million tCO2e
Potential 11.1
Social Total no. of clean energy 0 200,000 PV lanterns and 200,000
technology units distributed to ICS (estimated at 20% of total units)
the “poorest of poor”
Total no. of EPZs established 0 8 large EPZs (EPZ-L) and 20 small
EPZs (EPZ-S)
Growth and Total no. of clean energy units 1,000,000 PV lanterns and 1,000,000
Development distributed (all categories) ICS
Total no. of women employed 0 200 (refer total no. of new jobs
below) (at 50% of total no. of
people employed)
Total capacity of solar PV 0 500 kWp (50 kWp x 8 EPZ-L and 5
power plant installed kWp x 20 EPZ-S)
Total no. of training 0 16 per annum (2 training
programmess programmes/year per EPZ-L for
Interventions 1&2 respectively)
Economic Total no. of new enterprises 0 64 new enterprises
established
(8 enterprises – EPZ-L Model 1, 20
enterprsises – EPZ-S Model 1, 8
enterprises – EPZ Model 2 and 28
enterprises – EPZ Model 3)
Total no. of new jobs/ 0 400 new jobs created
employment created
(10 x 8 enterprises – EPZ-Model 1, 5.
X 20 enterprises – EPZ Model 1, 10.
x 8 enterprises – EPZ Model 2 and,
5. x 28 enterprises – EPZ Model 3)
Domain Parameters Baseline Target Value

Value (estimated ex-ante)
Institutional NAMA institutions established 0 NAMA Coordinating and
implementing entity including
MRV Cell established and
operationalized
Loans/grants distributed 0 US$ 13.26 Mio
5.5 Alignment with the INDC

Kenya, like other developing economies of Sub-Saharan Africa, bears the brunt of climate change impacts
and the associated socio-economic losses. As a signatory to the UNFCCC process, Kenya submitted the
country’s Intended Nationally Determined Contribution (INDC) before the COP 21 meeting in Paris. Kenya’s
INDC includes both mitigation and adaptation components based on national circumstances. In the case of
mitigation, the INDC states:
“Kenya seeks to undertake an ambitious mitigation contribution towards the 2015 Agreement. Kenya therefore
seeks to abate its GHG emissions by 30% by 2030 relative to the BAU scenario of 143 MtCO2eq in line with
its sustainable development agenda. This is also subject to international support in the form of finance,
investment, technology development and transfer, and capacity development.” (GoK_INDC, 2015) p.2.
The proposed emission reduction under this NAMA proposal of approximately 6 million tCO2e will therefore
contribute towards the stated abatement target of 30 per cent. The NAMA proposal also explicitly notes
the required support in the form of finance, technology, and capacity development. Among the specific
activities and programmes listed under mitigation, the Clean Energy NAMA directly contributes to the
priorities, listed in Table 6.
Table 6: Relevance of the NAMA to stated mitigation priorities in Kenya’s INDC
Stated priority in INDC Relevance of the Clean Energy NAMA

Expansion in geothermal, solar and wind energy The NAMA directly contributes to the promotion
production, other renewables and clean energy of renewable/clean energy, namely solar PV and
options biomass
Enhancement of energy and resource efficiency The NAMA directly contributes to improving energy
across the different sectors and resource efficiency as it promotes PV and ICS
which reduce dependency on baseline fuels such as
kerosene and woody biomass
Progress towards achieving a tree cover of at Use of ICS can directly contribute to reducing
least 10% of the land area of Kenya deforestation as less charcoal and wood fuels is used
for cooking
Clean energy technologies to reduce As stated above, use of ICS reduces the overreliance
overreliance on wood fuels on wood fuels
In addition, the INDC notes that Kenya does not rule out the use of international market-based mechanisms
in line with agreed accounting rules. The MRV system proposed under this NAMA therefore will be
transparent and available for international inspection as appropriate.
5.6 Alignment with Sustainable Development Goals

The Government of Kenya’s overriding objective is give all its citizens the opportunity to live a quality life
within a clean and secure environment as envisaged in the country’s primary development blueprint, the
Kenya Vision 2030. In pursuit of this objective, the Government had placed great emphasis on achieving
the Millennium Development Goals (MDGs) as a framework for attaining balanced socio-economic
development. As the MDG concluded in 2015 and were replaced by the Sustainable Development Goals
(SDGs), the NAMA will contribute to the national targets for the revised SDG parameters and Vision 2030 in
establishing Kenya as an industrializing, middle-income country, with the capacity to provide a high quality
of life to all its citizens.
The table below provides an indicative list of SDG targets, in line with the SD Tool (Section 6.3.2) that will be
positively affected by the SD benefits resulting from the NAMA.
Table 7: Direct SD benefits from the NAMA in the context of SDGs
SDG Goals/ Indicator Brief Description of Potential Impact through

the SDG Indicator NAMA SD Benefits
13 Emission reduction through NAMAs are mitigation actions and the
mitigation directly contribute to technical interventions will lead to
climate change under Goal 13 emission reduction, thus contribute to
positive climate action.
1.4 Ensure poor have access to In making clean energy technologies
services and new technology available to the “poorest of poor”, the
NAMA ensures access to basic services
and new technology to all sections of
society, particularly the rural poor of
Kenya.
8.3 Growth of SMEs including access An enabling environment for
to finance manufacturing and distribution under
the NAMA is created through setting up
of EPZs, which are provided with finance
in the form of loans and grants.
7.1 Universal access to affordable, The distribution of 2 million clean
reliable and modern energy energy technology units, namely PV
services lanterns for lighting and ICS for cooking
helps to bring universal access to
affordable, reliable and modern energy
services to rural households.
SDG Goals/ Indicator Brief Description of Potential Impact through

the SDG Indicator NAMA SD Benefits
5.5 Ensure equal opportunities and The EPZ business models allow the
participation of women creation of local employment and the
NAMA aims to ensure that 50% of the
new jobs will be for women.
9.5a Facilitate SD infrastructure By creating an environment for setting
development through enhanced up 500 kWp of solar PV power plant on
financial, technological and EPZs supported through grant finance,
technical support to African the NAMA directly contributes to setting
countries up SD infrastructure in Kenya.
4.4 Increase skills of youth and By creating new employment and
adults for employment and training of workers and staff to
entrepreneurship undertake skilled jobs (e.g. assembly
of lanterns, manufacturing of ICS),
the NAMA directly contributes to new
employment but also entrepreneurship
(e.g. repair and after sales services).
9.3 Increase small scale enterprises The 28 EPZs will contain several
including access to finance and individual micro- and small- scale
integration to value chain and enterprises that will be supported
markets through loans and the entire NAMA
supports the creation of an enabling
market environment across the value
chain, from manufacturing, distribution,
marketing and after sales for clean
energy technologies.
8.3 Promote job creation The 28 EPZs along with small-l scale
enterprises will directly promote job
creation while supporting several
indirect jobs. Moreover, the jobs will
be created across several location of
the country, increasing the outreach of
the resulting socio-economic benefits
across Kenya.
16.6 Develop effective, accountable and The NAMA will directly contribute to
transparent institutions at all levels the objectives of the National Energy
Policy, objectives and targets by
supporting the creation of a NCA and
NIE with adequate training and capacity
development.
17.1 Strengthen resource mobilization The NAMA Finance elaborates not
including international support only the country contribution, but also
recommendations for international
donor contribution in the form of loans
and grants.
48 NAMA INTERVENTION—PRIVATE SECTOR-ENABLED BUSINESS MODEL
6 NAMA INTERVENTION—
PRIVATE SECTOR-ENABLED BUSINESS MODEL
This chapter focuses on the key “building block” of the NAMA, namely the proposed “technical interventions”
that will ultimately lead to scaled up emission reduction, sector transformation by bringing about access
to energy and an increased level of sustainable development among communities within Kenya. The
interventions proposed under the NAMA are directly aligned to the objectives of the NAMA stated in Section
2.4. The two objectives result in two distinct physical interventions:
■ Intervention 1: Establish 28 Energy Productivity Zones’ in Kenya with their own PV- based electricity
power plant.
■ Intervention 2: Distribute Clean Energy Technologies, enabled through consumer finance.
Physical Outcomes:
The technical interventions of the NAMA that will result in real and measureable outcomes that will lead to
scaled up emission reduction are quantified below:
■ Intervention 1 - Outcome 1: 28 of EPZs established in Kenya and operationalized

■ Intervention 1 - Outcome 2: 500 kWp of Solar PV based power plant implemented
■ Intervention 2 – Outcome 1: 1 million PV lanterns distributed (NAMA life span)

■ Intervention 2 – Outcome 2: 1 million ICS distributed (NAMA life span)
6.1 Energy Productivity Zones (EPZs)—The Change Agent

The objectives of the NAMA will be met by setting up a network of Energy Productivity Zones (EPZs) across
Kenya. EPZs embody holistic approach to tackling several challenges under a NAMA. The concept of EPZs
is not entirely new; they already exist in Kenya in the form of ‘Energy Centers’. The idea of establishing
Energy Centers is taken a step further by stimulating an environment that allows for the manufacturing and
distribution of clean energy technologies.
The EPZ model simultaneously looks into the issues of access to an assured supply of clean energy, socio-economic
development of local communities and a business model that is sustainable and can attract finance. The model
recognizes that the solution to lifting communities out of poverty is access to sustainable modern electricity services,
but that the same communities often do not possess the income streams to pay for the often high cost of electricity.
In creating an income generating opportunity the EPZs will have a positive impact on the livelihoods of
people directly/indirectly employed in manufacturing of clean energy technologies and EPZs but also the
community at large. As incomes rise, there will be an improvement in the standards of education, healthcare
and sanitation levels of the local communities.
6.2 Intervention 1: Establish 28 EPZs in Kenya with their own PV Power Plant
Objective 1 calls for enabling the private sector to participate in the manufacturing and distribution of the
clean energy technologies in Kenya. This will be done by setting up 28 Energy Productivity Zones (EPZs)
across Kenya.
The EPZ is the physical intervention and consists of several elements including work spaces, an energy
supply (see below) and supporting services and infrastructure. These elements of the EPZ are intended to be
permanent structures designed and built using local materials, local manpower with consideration for the
local climate to keep the capital investments affordable and low in maintenance.
■ Work Spaces: Consisting of well-lit and well-ventilated group of buildings, the work spaces consist
of areas for manufacturing, storage and office spaces designed for businesses and private sector
enterprises to undertake gainful income generation activity. When fully realized, the work areas will
support a broad variety of economic activities through micro, small- and medium- scale enterprises that
can support and be supported by the local economy.
■ Energy Supply: To enable the physical activities to take place, every EPZ will be provided with an
assured supply of electricity, typically through a solar PV- based power plant consisting of solar
modules, inverters, battery banks and a mini grid that connects the power supply to the individual work
spaces. The final design of the solar power plant may be a hybrid solution combined with grid supply
or diesel generators or other small renewable energy solutions (e.g. pico-hydro, small wind etc.), but for
the purpose of this NAMA it is intended to be a stand-alone PV- based power solution to ensure that the
design is universally applicable across Kenya.
■ Supporting services and Infrastructure: There are supporting services and infrastructure required to
ensure the overall success of the EPZ and the NAMA. These will include:
—— Facilities for training, capacity development and raising awareness;
—— Shops or stores for the actual sale of goods and services;
—— IT infrastructure and facilities for data collection and recording (e.g. NAMA MRV)
—— Office spaces for supporting activities (e.g. microfinance institutions).

Manufacturing and Distribution Facility:
The purpose of the EPZs is to encourage the private sector to participate in the manufacturing and
distribution of clean energy technologies proposed under the NAMA.
■ Manufacturing Facilities: The EPZs, with work spaces, energy and supporting services will allow
private sector actors (e.g. existing cookstove manufacturers, businesses, cooperatives etc.) to establish
manufacturing and/or assembly facilities for clean energy technologies under the EPZ. It must be noted,
however, that only eight of the 28 EPZs are intended to have manufacturing facilities.
■ Distribution facilities: All EPZs are expected to act in a manner similar to Energy Centers and be
involved with the distribution and retail of the clean energy technologies across Kenya. The private
sector actors involved with manufacturing may choose also to own the distribution facilities in the same
EPZ and/or may choose to set-up distribution points in other EPZs. This is expected to encourage private
sector actors pro-actively to promote clean energy technologies and create a competitive business
environment.
6.2.1 Intervention 1—Outcome 1: 28 of EPZs Established
The NAMA recognizes that a “one size fits all” approach may not be the most appropriate one given the wide
socio-economic differences in Kenya and it is proposed to establish 2 categories of EPZs, namely large (L),
and small (S). Of the 28 EPZs, the following distribution has been considered under the NAMA:
■ Eight large EPZs: EPZ-L.
■ Twenty small EPZs: EPZ-S.
The reason for categorizing EPZs is to ensure that the design and scope are well placed to meet the local
conditions where the EPZ is located. While the actual locations and number of EPZs will be determined by a
Implementation Plan (see Capacity development Measure - Implementation Plan), this document provides
the potential locations based on the concept of “catchment area”, i.e. the potential population that an EPZ
can service. The Implementation Plan will spell out “Eligibility Criteria” for each type of EPZ, including the
minimum requirements that need to be met by the private sector actors investing in the business models
and the EPZs. The table below provides indicative eligibility criteria for EPZs assumed under the NAMA:
Table 8: Comparison between the two types of EPZs defined under the NAMA
EPZ-L EPZ-S
Catchment area (e.g. population of the town) Greater than 200,000 Less than 200,000
No. of EPZs (total 28) 8 20
Manufacturing Facility (8.) Yes No
Distribution hub (28.) Yes Yes
PV Power Plant (per EPZ) 50kWp 5kWp
EPZ-L EPZ-S
MRV point for data collection Yes No
Internet enabled IT facility Yes Yes
Training facility (e.g. A/V equipment) Yes No
Finance (e.g. office for micro-finance) Yes No
6.2.2 Intervention 1—Outcome 2: 500 kWp of Solar PV-based power plant implemented
To encourage the private sector to invest in the EPZ, the NAMA proposes to provide every EPZ with a
PV- based power plant so that it is self-sufficient in its energy requirements. While the exact technical
specifications (e.g. standalone PV plant or a hybrid system with grid supply or diesel generator) and capacity
of the PV power plant will be determined under the ‘Implementation Plan’ and the power requirements of
the various income generating activities, for the purpose of this NAMA, the PV Power Plants are assumed to
be standalone PV power plant consisting of modules, battery banks, electronics of the following capacities:
■ EPZ-L – 50 kWp for each of 8 EPZs (total: 400 kWp)
■ EPZ-S – 5kWp for each of the 20 EPZs (total 100 kWp)
Total PV power plant capacity: 500 kWp
6.3 Intervention 2: Distribute Clean Energy Technologies enabled through consumer finance
To tackle the challenge of lighting and cooking in rural communities, Kenya is currently promoting the use
of solar PV technology based lanterns (PV lanterns) and improved cookstoves (ICS). However, the current
efforts are limited in terms of scale and outreach due to several practical challenges, and the NAMA will
facilitate the distribution of the following technologies through appropriate financing schemes:
Table 9: Two technology product categories for two distinct sets of end consumers
Product Category Target Consumers Distribution Model

Basic PV Lantern The “poorest of the poor” Distributed under a grant based model under
sections of the society Public Procurement Scheme
General PV Lantern All sections of the rural Distributed through the Consumer Finance
society model
Basic ICS The “poorest of the poor” Distributed under a grant based model under
sections of society ‘Public Procurement Scheme
General ICS All sections of the rural Distributed through the Consumer Finance
society model
For the purpose of the NAMA two types of product categories are considered:
Basic Product Category for PV lantern and ICS:
These are intended to be a cost effective solution procured by the government directly from manufacturers
or distributors under a public procurement scheme and distributed to the “poorest of the poor” sections of
the society under a grant based model.
While the basic product makes access to energy accessible to the economically weakest members of society
in Kenya, the public procurement scheme will help kick-start the manufacturing and distribution activities
thanks to assured uptake of clean energy technologies. This will be crucial to the success of the EPZ model
during the initial years of NAMA implementation.
General Product Category Models of PV Lanterns and ICS:
These are general category products that will be made available to all sections of the society through an appropriate
financing scheme. While several product models for each of the two technologies can be manufactured and
distributed, the NAMA uses a single model / single price approach for the purpose of simplification.
Rationale for two Product Categories
There are certain advantages/disadvantages in pursuing two strategies with the models. Kenya can choose
to wither have a single model for both categories with different pricing (Strategy 1) or have two distinct
models for both product categories (Strategy 2).
The advantage of Strategy 1 is lower production costs due to mass production and no difference in the
product offered to all sections of the society including the poorest. The challenge however is to prevent
the ‘basic’ models made available almost free of cost to the poorest of poor from being re-sold at market
price to the general population. This can be partly resolved through Strategy 2 where distinct colours,
specifications etc. can ensure a distinction between the two models, making it easier to track any potential
mis-management of the supply chain.
Table 10: Schematic representation of suggested approach

(images used are for representation purpose only)
Suggested Strategy 1 Suggested Strategy 2
Single model for entire group of end-consumers Multiple models with varying features reflected
but differential pricing in differential pricing
6.3.1 Intervention 2—Outcome 1: 1 million PV lanterns distributed
Solar PV Lantern Technology:
A typical solar lantern consists of light-emitting diodes (LEDs), a PV panel and a rechargeable battery, encased
in a durable plastic shell. A standardized product that can be sold off the shelf, the solar lanterns can offer 3-4
hours/day of run-time (i.e. the number of hours the lamp is operational on a full day charge). Solar powered
lanterns are poised to improve incomes, educational attainment and health across the developing world. As
solar lanterns would typically replace kerosene based lighting solutions, they bring in train significant socio-
economic benefits from reduced exposure to fumes, recurring fuel costs and improved illumination.
Under the proposed distribution scheme of the NAMA, 1 million solar PV lanterns (Basic plus General Models
as elaborated under ‘Strategy 2’ above) will be distributed over the life span of the NAMA Table 11 below
provides indicative numbers of units of PV lanterns manufactured across the 8 large EPZs. It is assumed
that all 28 EPZs will procure a minimum number of units annually for further distribution through the ‘end-
consumer financing model’ (refer Section 10.3.2 on Revolving Loan Fund for more information).
Table 11: Indicative number of units of PV lanterns manufactured across the lifespan of NAMA
EPZ-1 EPZ-2 EPZ-3 EPZ-4 EPZ-5 EPZ-6 EPZ-7 EPZ-8

2017
2018 5,000 5,000
2019 5,000 5,000
2020 10,000 10,000 5,000 5,000 5,000 5,000
2021 10,000 10,000 5,000 5,000 5,000 5,000
2022 10,000 10,000 10,000 10,000 10,000 10,000 5,000 5,000
2023 20,000 20,000 10,000 10,000 10,000 10,000 5,000 5,000

2024 20,000 20,000 10,000 10,000 10,000 10,000 10,000 10,000
2025 20,000 20,000 20,000 20,000 20,000 20,000 20,000 20,000
2026 20,000 20,000 20,000 20,000 20,000 20,000 20,000 20,000
2027 20,000 20,000 20,000 20,000 20,000 20,000 20,000 20,000
2028 20,000 20,000 20,000 20,000 20,000 20,000 20,000 20,000
Total 160,000 160,000 120,000 120,000 120,000 120,000 100,000 100,000
■ 200,000 Basic model of Solar PV lanterns distributed (through public procurement)
■ 800,000 General models of Solar PV lanterns distributed (through consumer finance)
Total PV lanterns distributed: 1 million units. (2017-2018)
6.3.2 Intervention 2—Outcome 2: 1 million ICS distributed
Improved Cookstove Technology:
Improved cookstoves (ICSs) are wood fuel based cooking solutions that use a significantly lower quantity
of fuel (wood or charcoal) than traditional cookstoves (e.g. traditional three stone or open fire cooking
arrangements). There are several improved cookstoves programmes in the developing world. The largest
global programme is the Global Alliance for Clean Cookstoves with a target of reaching 100 million
households by 2020. Currently, the interest in ICSs focuses on the “triple benefits” they provide: in improved
health and time saved for households, in preserving forests and associated ecosystem services, and in
reducing emissions that contribute to global climate change.
Under the proposed distribution scheme of the NAMA, 1 million ICS (Basic + General) shall be distributed
over the life span of the NAMA. The Table 12 below provides indicative numbers of units of ICS to be
manufactured across the 8 large EPZs. It is assumed that all 28 EPZs will procure a minimum number of units
annually for further distribution through the end consumer financing model.
Table 12: Indicative number of units of ICS `manufactured across the life span of NAMA

2017
2018 5,000 5,000
2019 5,000 5,000
2020 10,000 10,000 5,000 5,000 5,000 5,000
2021 10,000 10,000 5,000 5,000 5,000 5,000
2022 10,000 10,000 10,000 10,000 10,000 10,000 5,000 5,000
2023 20,000 20,000 10,000 10,000 10,000 10,000 5,000 5,000
2024 20,000 20,000 10,000 10,000 10,000 10,000 10,000 10,000
2025 20,000 20,000 20,000 20,000 20,000 20,000 20,000 20,000
2026 20,000 20,000 20,000 20,000 20,000 20,000 20,000 20,000
2027 20,000 20,000 20,000 20,000 20,000 20,000 20,000 20,000
2028 20,000 20,000 20,000 20,000 20,000 20,000 20,000 20,000
Total 160,000 160,000 120,000 120,000 120,000 120,000 100,000 100,000
■ 200,000 Basic model of ICS distributed (through Public Procurement)
■ 800,000 General models of ICS distributed (through consumer finance)
Note: Table 11 and 12 are identical as the number of PV lanterns and ICS units are the same.
Total PV ICS distributed: 1 million units. (2017-2018)
6.3 Eligibility Criteria - Private Sector Engagement

The NAMA aims to stimulate transformation for the household energy sector by creating an enabling
environment for private sector entities to participate in the proposed interventions. To maximize the social,
economic and environmental impact of every dollar invested and create the required momentum for
entrepreneurs to participate in creating a market- driven” EPZ sustainable business model”, the NAMA places
no restriction on the type of participants and is open to all, including the following:
■ Existing private sector entities in Kenya involved in the manufacture and distribution of renewable
energy and clean cooking solutions, including PV lanterns and improved cookstoves.
■ Future players and businesses can be both national and international stakeholders willing and
capable of participating in the NAMA.
■ Local communities/cooperatives who may register with the appropriate government authorities to
participate in the NAMA.
The term “private sector entity or participant” is used to refer to various types of organization that will be
invited to participate in the NAMA. While there is no restriction on the type of private sector participants, the
Government of Kenya (GoK) will establish a set of eligibility criteria to ensure that interested private sector
participants have the minimum level of operating capacity (e.g. financial strength, manpower, knowledge
base etc.) required to undertake the activities under the business model and ensure the overall success of
the NAMA. A proposed idea is to develop a scoring system, based on the following:
Technical Capacity: The entity must exhibit a certain level of competence with regards to availability (or
access to) skilled work force and knowhow. The criteria can ensure that participants bidding for a certain
type of activity (e.g. manufacturing or distribution) have specified skills and technical or market knowledge
(e.g. entities interested in assembling PV lanterns may be required to have existing skills, such as soldering of
electrical circuit boards).
Financial Capacity: Private sector entities must exhibit a minimum level of financial readiness to undertake
the interventions. This can be crucial in accessing financing (e.g. bank loans) and a differentiated scoring
system can ensure that various categories of entities can participate. For example, the equity contribution of
existing players can be different from that of new entities, to reflect the higher risks associated with the later.
(E.g. the scoring can be structured in a manner that the equity contribution for existing/ experienced entities
can be set at 20 per cent while making it higher for new participants to make up for their relative lack of
experience).
SD Benefits: Additional points can be made available to entities that exhibit greater potential for
sustainable development (e.g. entities involved with youth/women empowerment). The eligibility criteria
can ensure that an interested participant brings a certain type of value addition that can strengthen the
delivery of sustainable development benefits under the NAMA.
6.4 Driving Interventions through Business Models

The EPZ model represents a holistic approach to tackling several challenges under a NAMA and
simultaneously addresses three interconnected issues that will collectively contribute to the overall success
of the two interventions, namely:
■ Access to an assured supply of clean energy technology;
■ Socio-economic development of local communities; and
■ A business model that is sustainable and attractive to finance.
The model recognizes that the solution to lifting communities out of poverty is access to sustainable
modern electricity services, but that the same communities often do not possess the income streams
required to pay for the relatively high cost of electricity. In creating, an income generating opportunity
the EPZs will have a positive impact on the livelihoods of people directly or indirectly employed in the
manufacture of clean energy technologies and in the EPZs, but also on the community at large.
The process for approval for private sector entities must recognize three distinct types of participation in the
commercial activities or business models under the NAMA:
■ EPZ Business Model 1: Participation in the physical infrastructure related to the EPZ;
■ EPZ Business Model 2: Participation in the manufacture of clean energy technologies;
■ EPZ Business Model 3: Participation in the distribution of clean energy technologies.
While a single private sector entity can participate in all of the three business models, this NAMA document
elaborates the models separately, as the activities and capabilities required to build, own and operate each
is distinct, as are the revenue streams. The impact of business Models 1 and 2 relate to Intervention 1, while
Business Model 2 and 3 relates to Intervention 2, as further elaborated below.
EPZ Business Model 1—Participation in EPZ Infrastructure and Services
The first category of business model focusses on entities that will participate in establishing the physical
infrastructure including the solar PV power plant and associated services (i.e. construction of the EPZ
infrastructure, workspaces, installation, operation and maintenance of the solar PV power plant, purchase of
land for construction, etc.). The participant will generate income by renting out workspaces to other entities
in the EPZ, (e.g. the manufacturer and distributor of clean technologies) and by engaging in other income
generating activities (e.g. renting out spaces to other entities) and by charging consumers for the electricity
consumed. By ensuring income generation from sale of electricity, the EPZ model ensures the safety (against
potential thefts), upkeep and maintenance of the solar PV power plant.
EPZ Business Model 2—Participation in Manufacturing Activities
The second category of business model focusses on entities that will participate in the manufacturing
of the clean energy technologies (1 million PV lanterns and 1 million ICS) in the designated large EPZs.
The participants will be responsible for procurement of the technical equipment and machinery, and
to manufacture the required number of units as per established quality standards and procedures,
employing and training staff, renting workspaces in the EPZ to undertake the activity and paying for the
electricity consumed. In ensuring the later (i.e. using and paying for electricity from solar PV power plants),
the manufacturers will ensure that the power plants are designed for a defined capacity, operated and
maintained, making it attractive for other entities to participate in the EPZ model. The participant will
generate income by bulk sale of the finished goods (i.e. PV lanterns and ICS) to distributors and to the
government under a public procurement scheme (i.e. the basic models.
EPZ Business Model 3—Participation in Distribution / Retail and After Sales
The last category of business model focusses on entities that will participate in the distribution and in
providing after sales service of the clean energy technologies (1 million PV lanterns + 1 million ICS) to end-
consumers, engaging with financial institutions to make finance available and participating in the MRV
process as appropriate. It is in the distributor’s interest to undertake marketing, participating in road shows
and raising awareness of the clean energy technologies, consumer finance and the benefits of the NAMA in
general. The participant will generate income by selling individual units to end-consumers (by direct sale or
through consumer loans). As the point-of-sale, the distributors are also ideally placed to negotiate attractive
consumer financing schemes with local financial institutions, maintain a record of sales (for commercial
purposes) which in turn can benefit the MRV data collection process and provide after sales as a means to
boost brand value—thereby strengthening the interventions.
Developing an Inclusive Business Model through Social Impact Investing
Inclusive businesses integrate people with low-incomes into their value chains as consumers,
employees, producers or retailers. The organizations behind such business models range from small
enterprises to multinational corporations and originate from both industrialized and developing
countries. Private sector entities venturing into inclusive businesses mainly target startups and
small-to medium-sized enterprises.
Impact investing combines the advantages of large corporations and inclusive businesses,
and thus reduces some of the potential risks and weakness. The term “impact investing” has
gained popularity in recent times to refer businesses generating financial, strategic, social and
environmental returns. Corporations participating in social impact investing benefits from the
resulting reputational benefits (e.g. Corporate Social Responsibility or CSR) and gain a foothold in
a new market. Inclusive business enterprises benefit from reduced risks, opportunities for scale,
the ability to attract additional financing, gain business experience and perspective from a large
corporation and advance their sustainable development impacts.
Figure 6, below provides a schematic overview of the inter-relationship between the various interventions,
outcomes and the business models as discussed in this chapter.
Figure 4: Overview of the objectives, interventions and outcomes of the NAMA

60 CAPACITY DEVELOPMENT
This chapter focuses on the key capacity development activities that are proposed under the NAMA.
The approach in developing capacity development measures is the process through which individuals,
organizations and societies obtain, strengthen and maintain the capabilities to set and achieve the expected
development objectives over time. To ensure that capacity development is undertaken across the various
categories, the capacity development measures are categorized into systemic, institutional and individual
levels, defined as below:
■ Capacity development at the systemic level is the broad enabling environment within which the
individuals and institutions function and this includes all the national/sectoral policies, comprehensive
studies, rules and regulations that are required for the proposed activities under the NAMA to take
place.
■ Capacity development at the institutional level refers to strengthening of internal structures, procedures
and internal policies that will determine the effectiveness of an organization. The institutions considered
under this chapter are the NAMA coordinating authority (NCA) and NAMA implementing entity (NIE).
■ Capacity development at the individual level addresses the skills, experience and knowledge that will
be required by individual members of the participating stakeholders (e.g. private sector participants),
either acquired formally through education and training or informally through practice and observation.
These kinds of capacity development are expected to bring about the expected sector transformation
within Kenya, generated and sustained over a period of time. The table on the next page provides an
overview of the capacity development categorized by the specific interventions:
Table 13: Types of capacity development measure proposed under the NAMA
Intervention 1: Establish 28 EPZs in Kenya with PV based electricity power plant.

Systematic level ■ Technical Feasibility Study for pre-determined locations
■ Highlight “Quality Standard” for clean energy technologies

Institutional level* ■ Awareness creation for private sector participants
■ Capacity development for the NCA and NIE including Measuring, Reporting
and Verification (MRV) Cell.
Individual level ■ Training of workers and staff for Business Models 1 and 2
Intervention 2: Distribute “clean energy technologies” enabled through consumer finance.
Systematic level ■ Public procurement scheme
■ Community level demonstration and awareness creation

Institutional level ■ Capacity development for the NIE with focus on financing entities
Individual level ■ Training of workers and staff for Business Model 3
* Capacity development for the NCA and NIE is relevant for both interventions. The MRV Cell is a sub-unit
under the NIE responsible for the overall MRV activities under the NAMA.
7.1 Capacity development Measures for Intervention 1

Intervention 1 calls for establishing 28 EPZs across Kenya along with 500 kWp of Solar PV based power
plants to ensure that the EPZs are self-sufficient in their energy requirements. The activities proposed
under Intervention 1 will be primarily through the activities of private sector participants with a focus on
supporting EPZ Business models 1 and 2 (see Section 7.5 on Interventions). However, the NAMA will need to
support a series of measures to ensure that the stated outcomes are met.
7.1.1 Technical Feasibility Study for pre-determined EPZ locations
To determine the locations of the EPZs, the NAMA looks at the currently available statistical data from Kenya
National Bureau of Statistics (KNBS) on the number of households by lighting fuel and cooking fuel by
county. (KNBS, 2009). Table 14 looks at the total number (no.) of households (HH) in each county, and the
number of households with electricity and LPG respectively to determine the total number of households
without access to either of the two energy sources. This provides an estimate of the market potential for
PV lanterns and ICS. The original KNBS statistical data show that the households without electricity are
dependent on kerosene lanterns, pressure lamps and tin lamps as the primary source of lighting, while the
most popular alternatives to LPG are charcoal and firewood.
Table 14: Existing access to energy by County (No. of households rounded to nearest, 000)
No. County Total HH with HH HH with HH HH without EPZ

HH Electricity without LPG without Elec & LPG Type
1 Nairobi 985,000 712,000 273,000 221,000 764,000 1,037,000
2 Kakamega 355,000 20,000 335,000 3,000 352,000 687,000 EPZ-L
3 Nakuru 409,000 139,000 270,000 20,000 389,000 659,000 EPZ-L

4 Kiambu 470,000 253,000 217,000 62,000 408,000 625,000 EPZ-L
5 Meru 319,000 43,000 276,000 5,000 314,000 590,000 EPZ-L
6 Bungoma 270,000 12,000 258,000 2,000 268,000 526,000 EPZ-L
7 Machakos 264,000 45,000 219,000 8,000 256,000 475,000 EPZ-L
8 Muranga 255,000 35,000 220,000 5,000 250,000 470,000 EPZ-L

9 Kisii 245,000 19,000 226,000 3,000 242,000 468,000 EPZ-L
10 Kisumu 226,000 41,000 185,000 7,000 219,000 404,000 EPZ-S
11 Homa Bay 206,000 7,000 199,000 1,000 205,000 404,000 EPZ-S
12 Kitui 205,000 10,000 195,000 1,000 204,000 399,000 EPZ-S

13 Siaya 200,000 8,000 192,000 1,000 199,000 391,000 EPZ-S
14 Kilifi 200,000 33,000 167,000 4,000 196,000 363,000 EPZ-S
15 Migori 186,000 10,000 176,000 1,000 185,000 361,000 EPZ-S
16 Mombasa 268,000 158,000 110,000 24,000 244,000 354,000 EPZ-S
17 Makueni 183,000 11,000 172,000 1,000 182,000 354,000 EPZ-S

18 Nyeri 202,000 53,000 149,000 10,000 192,000 341,000 EPZ-S
19 Uasin Gishu 202,000 56,000 146,000 10,000 192,000 338,000 EPZ-S
20 Narok 169,000 10,000 159,000 2,000 167,000 326,000 EPZ-S

21 Trans Nzoia 170,000 15,000 155,000 1,000 169,000 324,000 EPZ-S
22 Kericho 160,000 17,000 143,000 1,000 159,000 302,000 EPZ-S

23 Nandi 154,000 10,000 144,000 1,000 153,000 297,000 EPZ-S
24 Busia 154,000 10,000 144,000 1,000 153,000 297,000 EPZ-S
25 Kirinyaga 154,000 25,000 129,000 4,000 150,000 279,000
26 Bomet 142,000 5,000 137,000 - 142,000 279,000

27 Nyandarua 144,000 15,000 129,000 1,000 143,000 272,000
28 Nyamira 131,000 7,000 124,000 1,000 130,000 254,000
29 Kajiado 173,000 70,000 103,000 22,000 151,000 254,000
30 Mandera 125,000 3,000 122,000 - 125,000 247,000
31 Turkana 123,000 3,000 120,000 - 123,000 243,000 EPZ-S
No. County Total HH with HH HH with HH HH without EPZ

HH Electricity without LPG without Elec & LPG Type
32 Embu 131,000 19,000 112,000 3,000 128,000 240,000
33 Vihiga 123,000 8,000 115,000 1,000 122,000 237,000
34 Kwale 122,000 12,000 110,000 2,000 120,000 230,000
35 Baringo 110,000 10,000 100,000 1,000 109,000 209,000
36 West Pokot 94,000 2,000 92,000 - 94,000 186,000
37 Garissa 98,000 11,000 87,000 - 98,000 185,000 EPZ-S

38 Laikipia 103,000 18,000 85,000 4,000 99,000 184,000
39 Wajir 88,000 3,000 85,000 - 88,000 173,000 EPZ-S
40 Tharaka 88,000 7,000 81,000 1,000 87,000 168,000
41 El-Marakwet 77,000 5,000 72,000 - 77,000 149,000
42 Taita Taveta 71,000 10,000 61,000 1,000 70,000 131,000 EPZ-S
43 Marsabit 57,000 4,000 53,000 - 57,000 110,000 EPZ-S

44 Tana River 47,000 1,000 46,000 - 47,000 93,000
45 Samburu 47,000 3,000 44,000 - 47,000 91,000
46 Isiolo 31,000 6,000 25,000 - 31,000 56,000
47 Lamu 22,000 4,000 18,000 - 22,000 40,000
Location of 8 large EPZs (EPZ-L):
Based on the above data, it can be determined that excluding the capital city of Nairobi, the eight counties
of Kakamega, Nakuru, Kiambu, Meru, Bungoma, Machakos, Muranga and Kisii have a market potential of at
least 400,000 households. Hence, it is proposed that the large EPZs for manufacturing and distribution be
located in these eight counties.
Location of 20 small EPZs (EPZ-S):
The remaining small 20 EPZs are categorized into two types, 5 EPZs are located in the remote and large
counties of Turkana, Garissa, Wajir, Taita taveta and Marsabit each with a minimum market potential of
100,000 households with the remaining 15 EPZs located in the next most populous counties in terms of
market potential as shown in the table above.
Expected Outputs of Technical-Feasibility Study
As noted above, the locations of the 28 EPZs (8 EPZ-L and 20 EPZ-S) have been identified in line with the
existing population and “catchment area” (i.e. potential target market for each EPZ for sale of clean energy
technologies). However, the current information is based on official statistics that will be outdated at
the time of implementation and it is proposed that a national consultant be hired and entrusted with
undertaking a feasibility study to reinforce the locations of the 28 EPZs. The feasibility study should
be undertaken as a combination of desk based review and field visits to select sites and carried out in
cooperation with Kenya National Bureau of Statistics. The final report should include (but not be limited to)
information on the following:
■ Updated population data, including the number of rural households;
■ Number of households by existing baseline fuel (e.g. kerosene, charcoal etc.);
■ Potential location within each county for EPZs;
■ Potential demand for technologies based on existing baseline data;
■ Existing policies, programmes and projects that overlap with the NAMA; and
■ A list of potential private sector participants.
Entity Responsible: A national consultant can be appointed by the MOEP to undertake the feasibility study.
Alternatively, the study can be carried out by the KNBS and submitted to the MOEP. The financial outlay
for this measure is the allocation for hiring the services of a national consultant. The expected budget is
outlined in Chapter 10 on Finance.
Timeframe: 3 months (2017)
Final Deliverable: A study report containing information on the pre-determined locations
7.1.2 Highlight Quality Standards
Note: The standards highlighted in this section already exist and no specific activity is intended under this
measure except making the standards available for easy access by potential private sector participants. The
purpose of this section is to elaborate on the existing standards.
The objective for highlighting Quality Standards for PV Lanterns and ICS is to ensure that the manufacturing
of models by various private sector entities complies with minimum technical specifications of existing
standards identified by the GoK. This will ensure several advantages that will ultimately support the overall
success of the NAMA, namely:
■ Manufactured products of a certain model type are of uniform minimum (or better) quality;
■ Products that have minimum technical life span thus building market confidence;
■ Fair market competition due to fair pricing;
■ Avoiding the market being flooded with low quality or counterfeit products;
■ Strengthening private sector participants and promoting local manufacturing.

Existing Standards in Kenya:
KS 2542:2014 Kenya Standard—Off-grid Solar Photovoltaic Lighting Kits
This draft standard applies to off-grid lighting appliances or kits that can be installed by a typical
user without employing a technician. The kits generally consist of a light source (LED, CFL, or other), a
rechargeable energy storage device (usually a battery), an energy generation device or source (PV module,
dynamo, AC grid, unregulated DC input, or other), and internal electronics. Lighting appliances or kits with
PV modules larger than 15 Watt-peak (peak power under standard test conditions) are excluded from the
scope of this standard.
Reference: Kenya Gazette Notice No. Vol.CXVII-No.17 - (GoK_KenyaLaw, 2015)
Additional Source: (ERC-Kenya, 2014)
KS-1814-1: 2005—Kenya Standard for Improved Cookstoves
The Energy Regulatory Commission (ERC) points to KS-1814-1: 2005 developed by the Kenya Bureau of
Standards as the default standard for the manufacture and distribution of improved cookstoves. In addition,
in the ”Proposed Regulations In Respect Of Energy (Improved Biomass Cookstoves) Regulations, 2013”
the ERC identifies the requirements for licensing of improved biomass cookstove technicians, licensing
for manufacturers, distributors and contractors and additional conditions (e.g. inspection, suspension of
licenses etc.)
Reference Kenya Gazette Notice No. Vol.CXV-No.65 - (GoK_KenyaLaw, 2013)
Additional Source: (ERC-Kenya, 2013)
It is proposed that the above stated standards for the PV lanterns and ICS as specified in the government
Gazette form the basis for the Quality Standards under the NAMA.
Entity Responsible: Setting quality standards is led by the Kenya Bureau of Standards (KEBS) the
designated government authority for promoting standardization in industry and commerce. The above
quality standards currently exist in Kenya and will form the basis for manufacturing and distribution of clean
energy technologies. No specific action is envisaged at this point of time, but the KEBS will be responsible
for updating of the existing standards on a periodic basis and informing the MOEP of the changes. As the
standards already exist, no additional finance is allocated now.
Timeframe: Quality Standards already exist.
Final Deliverable: The MOEP is expected to make the Quality Standards available on a public platform for
easy access by potential participants.
7.1.3 Capacity development for the NCA and NIE
The second institutional level capacity development focuses on the government entities responsible
for the overall coordination and implementation of the NAMA, including the MRV system. The capacity
development for the two entities will consist of two components:
Component 1: Targets support of the implementation (e.g. improvement of policies and coordination
of public institutions, processes, preparation of documentation) of the NAMA and will provide capacity
development for the other involved governmental entities (e.g. the NIE). The capacity development
programme under Component 1 will support:
■ Improving NAMA related laws;
■ Implementing NAMA processes (technical and financial project cycle) and institutional coordination;
■ Preparing NAMA project documentation; and
■ Searching for and training staff for new vacancies under the NAMA.
This first component is focuses solely on activities which have to be performed by the NAMA Coordinating
Authority and the NAMA Implementing Entities.
Component 2: Focus on the awareness raising and marketing side of the NAMA after implementation
and will provide (i) general capacity development to create a common awareness of the NAMA but also (ii)
specific stakeholder-oriented capacity development. The capacity development under Component 2 will
be undertaken by the staff of the NCA and NIE trained under Component 1. This second component of the
capacity development programme will consist of two sub-strategies:
■ First, private- sector- specific marketing/awareness raising strategies to ensure participation in the EPZ business
model under the NAMA. This is further elaborated in ‘Private Sector Awareness Creation’ in Section 8.14 below.
■ Second, a country-wide generic marketing/ awareness raising strategy for the NAMA will create
a common understanding of the benefits of the NAMA objectives and procedures. This is further
elaborated in “Marketing and Awareness Creation” in Section 8.2.2 under Intervention 2 below.
The capacity development for the government is graphically represented as in Figure 7 below.
Figure 5: Schematic Representation of Capacity development by Government Agencies

Existing Policy Alignment:
The objectives of the National Energy Policy, 2014 have several elements that highlight the role of the
government in promoting clean energy technologies. Among these are the following aims.: (GoK_NEP, 2014)
(pp. 10-11)
■ Promote capacity development in the sector through energy research, development, training and local
manufacture of energy plant, equipment, appliances and materials.
■ Promote appropriate standards, codes of practice and specifications for equipment, systems and
processes in the energy sector.
■ Promote healthy competition in the sector.
■ Promote cost effective and equitable pricing of energy.
■ Protect producer, supplier and consumer interests.
■ Promote both local and international investments in the energy sector.
■ Promote indigenous investments in the energy sector through incentives.
■ Promote and develop Government owned agencies in the development of energy resources.
Entity Responsible: A national consultant or technical programme manager will be appointed to lead the
proposed activities. The consultant will be employed by the MOEP under the proposed actions to convert
REA into NERA (See Section 4.3 for more information). As the role of the proposed national consultants
will directly contribute to the stated objectives and will greatly enhance the creation of NERA from REA, it
is proposed that costs pertaining to salaries and operating expenses are borne by the GoK. The financial
measure considers under “national contribution” the salary of a technical consultant for a period of three
years. After this period the in-house staff of NCA and NIE will be sufficiently qualified to undertake periodic
capacity development for the remainder of the NAMA life span.
Timeframe: On-going basis over the NAMA implementation with an initial appointment of three years for a
national consultant (2017-2019).
Final Deliverable: The NCA, NIE and MRV Cell are operationalized.
7.1.4 Private Sector Awareness Creation
The success of the NAMA implementation is based on informing, inviting and encouraging the private sector
to participate in the business models under the NAMA. This will require a level of outreach and building
awareness around specific elements of the NAMA, including (but not limited to):
■ An overview of the NAMA, including its stated objectives, timeframes, expected outcomes and the
broader goals of sector transformation, emission reduction and sustainable development;
■ Detailed understanding of the proposed business models under the NAMA and the expected activities
that a participating entity is expected to undertake, including a techno-commercial plan (e.g. the solar
PV power plant and availability of electricity, pathways for income generation, potential number of units
that can be sold based on the Technical Feasibility Study etc.);
■ The financial support available (equity contribution, expected loans, repayment models, etc.);
■ Supporting measures and compliance (e.g. Quality Standard, eligibility criteria); and
■ Expected additional tasks concerned with transparency and MRV (e.g. reporting the number of units
sold).
In line with the NEPP as stated in Section 8.13, this capacity development measure directly contributes to
the following objectives:
■ Promote both local and international investments in the energy sector.
■ Promote indigenous investments in the energy sector through incentives.
The aim of the awareness creation is to ensure that a high level of interest is generated among potential
stakeholders (existing manufacturers, local communities, and international participants) to participate and
invest in the business activities proposed under the NAMA. The participants must be made fully aware of the
technicalities involved in establishing a business under the EPZ models and ensure a smooth transition from
information gathering to starting e physical activities under the NAMA.
Entity Responsible: A national consultant or a business manager will be appointed to undertake the
proposed activities. As the role of the business consultant is in line with the stated objectives of the NEP
2014 the financial measure considers under “national contribution” the salary of a business consultant for a
period of three years—the time required to establish and operationalize the 28 EPZs.
Timeframe: Initial three years of NAMA implementation (2017-2019)
Final Deliverable: 28 EPZs are operationalized with private sector participation.
7.1.5 Training of Staff and Workers
While a dedicated business consultant will support the private sector participants for an initial period of
three years, the regular training of staff and workers is expected to be undertaken by the private sector
entity participating in the business models for EPZ and manufacturing. The focus of the training will include
(but not be limited to):
■ Understanding of the overall goals of the NAMA including sustainable development;
■ Specific training related to operating of plant and machinery (e.g. solar power plant, manufacturing of
PV lanterns and ICS etc.);
■ Importance of MRV and the need for providing appropriate data to the members of the MRV Cell;
■ Additional information as appropriate.
Entity Responsible: All in-house training of workers and staff will be carried out by the private sector
entity participating in the two business models (EPZ Business Models 1 and 2). A minimum of one training/
capacity development programme per year will be required to be undertaken in eight of the EPZ-L. No
financial allocation is considered under the NAMA as the costs for such training programmes will be borne
by the private sector participants.
Timeframe: Over the NAMA lifespan.
Final Deliverable: One training programme per year for each of the eight EPZ-L.
7.2 Capacity development Measures for Intervention 2

Intervention 2 calls for the distribution of 1 million PV lanterns and ICS respectively over the life span of the
NAMA (2017-2028). This will be done through an appropriate consumer financing scheme. However, the
NAMA will need to support a series of measures to ensure that the stated number of units are successfully
distributed to end consumers.
7.2.1 Public Procurement Scheme
The idea of “Public Procurement” is to ensure that the poorest sections of society, with very little or no ability
to pay for the goods or services are provided with a minimum level of access to clean energy by making
available PV lanterns and ICS. Under this NAMA it is proposed that 20 per cent of the total number of units
(i.e. 200,000 of 1 million units each of PV lanterns and ICS) are procured directly by the government from the
manufacturers at a fixed price. As the technology models under public procurement have a price cap, the
government can require the manufacturers to develop a “basic” version of the models that are cost effective
solutions (e.g. a PV lantern without a mobile charging facility as compared to a “general” version of the
lantern) or can choose to pick an agreed number of “general” versions of the models at a pre-agreed price.
As noted in the NEPP, the government currently has a mandate to promote the installation of 100,000 solar
PV home systems by 2017 and roll out a programme to distribute solar lanterns. (GoK_NEP, 2014) (p. 58). The
NAMA recommends that the MOEP extend the mandate to include ICS and establish a procurement scheme
for 200,000 (or 20 per cent) units each for PV lanterns and ICS. The procurement scheme is expected to last
over a period of 10 years.
Entity Responsible: The MOEP as the NCA will be responsible for coordinating with various other
government agencies in establishing the procurement scheme. The financial outlay will be equivalent to
the selling price payable to the manufacturers for procuring the total number of units under the public
procurement scheme.
Timeframe: Initial 10 years of NAMA implementation (2017-2026)

Final Deliverable: 200,000 PV lanterns and 200,000 ICS are procured and distributed.
7.2.2 Marketing and Awareness Creation
Marketing, awareness creation and community level demonstration are essential to ensure that rural
communities are made aware of the technologies and proposed financing scheme to create a “market pull”
from the demand side. As this is expected to benefit the private sector the major effort in marketing and
awareness creation will be led by the individual private sector entities responsible for distribution and retail
of the technologies, with additional support from the NCA and NIE.
In addition to strengthening the capacity of the private sector to undertake community level project
demonstrations and county/local level marketing, the government of Kenya will support a national campaign
through a combination of newspaper advertisements, radio advertisements and billboards during the initial
year to raise awareness about the NAMA, particularly informing rural communities on the following:
■ The technologies proposed under the distribution model, including the specific models;
■ Consumer financing schemes and accessibility;
■ The quality standards and life expectancy of the technology;
■ The socio-economic benefits including, the impact on maternal and child health;
■ Other benefits—e.g. women and youth employment opportunities in EPZs etc.
The NEPP recognizes the need for awareness creation and promotion of clean energy technologies as a
strategy for increasing renewable energy in Kenya. As a cross-cutting policy and strategy for renewable
energy, the NEPP will (p. 68):
■ Develop capacity development programmes for players in renewable energy technologies in

collaboration with training institutions and the energy centers;
■ Promote community based power generation;
■ Create awareness on the benefits resulting from development of clean energy technologies;
■ Establish a Renewable Energy Research Centre within the National Energy Institute for the handling of
renewable energy promotion, potential analysis, mapping and other related studies;
■ The government will provide necessary support for the implementation of the renewable energy
projects in populated areas including facilitation of acquisition, relocation and resettlement of project
affected persons.
As inadequate awareness and consumer apathy are clear challenges that the government wants to tackle,
the capacity development measures supporting marketing of the NAMA and awareness creation are clearly
in alignment with the government’s existing priorities.
Entity Responsible: The NIE will be responsible for overseeing the marketing and awareness creation
activities, and this will include a dedicated one-year campaign using radio, newspaper and other local
media (e.g. pamphlets, billboards etc). The financial measure takes into account the cost of these marketing
activities, including 200 minutes/year of radio campaign, one half page newspaper advertisement per
month in a national newspaper and a lump sum cost for other marketing material for a maximum period of
one year.
Any direct marketing and demonstration projects at county and/or community level will be directly
undertaken by the distributors as part of their marketing and outreach activities.
Timeframe: Initial year of NAMA implementation (2017)
Final Deliverable: 200 minutes of radio campaign, 12 newspaper advertisements and other media based
marketing and awareness creation undertaken in the first year.
7.2.3 Capacity development for Financial Entities (e.g. Banks)
This institutional capacity development measure is <similar to?> the capacity development for the NCA and
NIE but will focus on strengthening the institutional capacity of financial entities (e.g. local banks, micro-
financing entities, and other private funds) responsible for making consumer finance available for private
sector and end-consumers. The type of training will include (but not be limited to):
■ Overview of the NAMA finance including the available national contribution and international finance
with a focus on loans, grants available to various types of end users;
■ Specific training for private sector participants on the availability of loans for establishing and operating
the EPZ business models including equity, repayment schemes and approval process;
■ Specific training for distributors on the end-consumer loan process and the revolving loan fund;
■ Understanding the components of MRV and data collection about financial parameters.
Entity Responsible: A fund manager appointed by the international donor will be responsible to undertake
the proposed activities. The fund manager will be located either within a designated financial entity or the
NIE as deemed appropriate by the international donor. The fund manager will be appointed for a period of
three years and the financial support will include salaries for three years plus additional budget for operating
expenses (e.g. travel, undertaking local seminars, marketing material etc.). The financial outlay for the
consultant will be 10 per cent of the total international donor finance for operating the financial mechanism.
Timeframe: Initial three years of NAMA implementation (2017-2019)
Final Deliverable: The local bank(s) are selected and staff trained to disperse loans to private sector
participants and end-consumers.
7.2.4 Training of Staff and Workers
The regular training of staff and workers is expected to be undertaken by the respective private sector entity
participating in the distribution activities. The focus of the training will include (but not be limited to):
■ Understanding of the overall goals of the NAMA, including sustainable development;
■ Specific training related to distribution and after sales service;
■ Specific training about awareness creation and community level demonstration;
■ Emphasis on the importance of MRV and the need to provide appropriate data to the members of the
MRV Cell.
Entity Responsible: All in-house training of workers and staff will be carried out by the respective private
sector entity participating in the EPZ Business Model 3 (distribution). A minimum of one training/ capacity
development programme per year will be required to be undertaken by eight of the EPZ-L. No financial
allocation is considered under the NAMA as the costs for such training programmes will be borne by the
private sector participants.
Timeframe: Over the NAMA life span.
Final Deliverable: One training programme per year for each of the 8 EPZ-L.
7.3 Summary on Capacity development Measures

The approach undertaken in defining the capacity development measures is to ensure that financial
resources allocated are used efficiently and for maximum impact. The table below summarizes the key
capacity development measures, timeframes, entity responsible and financial outlay as highlighted in the
specific measures for Interventions 1 and 2 respectively:
Table 15: Summary table for Capacity development Measures
Measure Entity Timeframe Financial Outlay

Systematic Capacity development:
Technical Feasibility National Consultant 3 months Fixed lump sum consultancy fee
Study through MOEP/KNBS
Quality Standard KEBS No action None
required
Public Procurement NCA (MOEP) 10 years Equivalent to a pre-determined
selling price for200,000 PV lanterns
and 200,000 ICS.
No additional funding is envisaged

as the procurement will be cross-
subsidized within the NAMA
Measure Entity Timeframe Financial Outlay

NAMA Marketing and NIE (REA) 1 year Costs to cover 200 minutes of radio
Awareness Creation advertisements, 12 newspaper ads
and a lump sum amount for other
media.
Institutional Capacity development:
NCA and technical NIE National Technical 3 years 3 year salary + operating expense of
Consultant 2 consultants covered under national
Private Sector National Business 3 years budget as the efforts are aligned to
Consultant the priorities of the National Energy
Policy.
Salaries and operating expensive for

all staff appointed for NCA, NIE etc. to
be covered under national budget/
contribution.
Financial Institutions Fund Manager 3 years Covered by international donor
finance as 10% of total grants.
Individual Capacity development:
Workers and Staff Private Sector 12 years To be borne by the private sector
as part of their internal training
programmes.
A minimum of 2 training programmes

are proposed for each of the 8 EPZ-L
annually.
74 IMPLEMENTATION STRUCTURE
8.1 Governance and Management

The NAMA is seen as an important instrument for translating mitigation-related aspects of climate change
policy into on-ground project implementation. At the same time, the integration of climate change
into broader development planning, having NAMAs at the core, implies considering the necessary legal
instruments to be established at the highest level to ensure integrated approaches and sustainable and
implementable outcomes. This requires that responsibility for implementation lies with entities with
sufficient powers of enforcement and for framing the regulatory requirements for the energy sector.
Actions to Institutionalize the NAMA:
The coordination and management of the NAMA requires an institutional structure, which will meet the
following requirements:
■ It must be embedded in national and sectoral policies and strategies.
■ It must be capable of effective communication and reporting as required by international agencies,

such as the UNFCCC.
■ It must provide an interface to international bilateral and multilateral NAMA funding entities, such as
the Green Climate Fund and NAMA Facility, among others.
■ It must be able to ensure proper management of financial flows between the NAMA funding entities
and the recipients.
■ It must be able to ensure the achievement of NAMA targets in terms of distribution and use of improved biomass
(firewood and charcoal) stoves and solar lighting technologies, GHG mitigation and sustainable co-benefits.
■ It must be able to allow transparent monitoring of GHG emission reductions and Sustainable
Development indicators.
The recommended institutional structure of the NAMA is based on the following principles:
■ Ensuring strong involvement of national stakeholders to create country ownership and political
commitment;
■ Using existing and experienced entities and organizational systems which are already in place and allow
for prompt and smooth implementation of the NAMA;
■ Ensuring that the institutional structure is appropriate for the receipt of international private and/or
public donor funding.
8.2 Institutional Framework for NAMA Implementation and Management

The following institutional bodies will constitute the institutional structure for the NAMA at the country level:
■ NAMA National Focal Point or National NAMA Approver (NA) and NAMA Coordinating Authority (NCA)
■ NAMA Implementing Entities (NIEs)
■ NAMA Executing Entities (NEEs)
The following sections provide an in-depth understanding of the roles and responsibilities of the
institutional bodies listed above.
Figure 6: Schematic Representation of Institutional Structure for the NAMA

8.2.1 National NAMA Approver/Focal Point
The national NAMA Approver (NA) or Focal Point has the following roles:
■ Approving NAMAs proposed for registration in the UNFCCC NAMAs registry;
■ Reporting to the National Climate Change Steering Committee (NCCC) about international
developments and the status of the national NAMA portfolio, and following the advice/guidance of the
NCCC on international negotiations;
■ Providing guidance to sectoral NAMA coordinating entities (access to climate finance, financial flows,
MRV etc.);
■ Issuing procedures for accounting of emission reductions to avoid double counting of emission
reductions from various implemented NAMAs;
■ Supporting the preparation of the National Communication, Biennial Update Reports, and Summary of
GHG Reductions etc.
The Ministry of Environment, Natural Resources has already been appointed as the NAMA Approver (NA)/
Focal Point to the UNFCCC.
Contact Information:
The Principal Secretary,

Ministry of Environment, Natural Resources and Regional Development Authorities
NHIF Building,12th Floor, Ragati Road, Upperhill, P.O Box 30126-00100
Nairobi, Kenya.
Web site: www.environment.go.ke
8.2.2 National Coordinating Entity (NCA)
The NAMA Coordinating Authority (NCA) is the entity which coordinates the proposed NAMA. Its main tasks
include:
■ Acting as primary contact for international donor(s);
■ Managing and directing the NAMA;
■ Approving NAMA targets in line with the Implementation Plan;
■ Managing the implementation process concerning submissions of project applications and approving
disbursement of funds (in close collaboration with NIE - Financial trustee);
■ Approving and updating eligible interventions;
■ Approving annual monitoring reports prepared by the MRV Cell within the NIE (covering inter alia:
number of projects implemented, calculation of emission reductions, SD impacts etc.);
■ Supervising the financial flows between donors and beneficiaries;
■ Building capacity in institutions involved in the implementation of the NAMA;
■ Developing technical standards for equipment/installations used under the NAMA;
■ Coordinating promotion and awareness raising campaigns and to support the implementation of the
NAMA ;
■ Integrating the private sector into NAMA implementation;
■ Coordinating monitoring activities and preparation of monitoring reports through the MRV Cell and
with the support of the financial institutions;
■ Facilitating and coordinating verification through the external designated entity.;
■ Reporting to the NA to fulfil reporting requirements to the donor(s);
■ Cooperating with financial internal and external auditors on the MRV process.
The Ministry of Energy and Petroleum will be the NAMA Coordinating Authority.
Contact Information:
The Principal Secretary,

State Department of Energy
Ministry of Energy & Petroleum, Nyayo House,
Kenyatta Avenue, P. O. Box 30582
Nairobi, Kenya
Web: http://www.energy.go.ke
8.2.3 NAMA Implementing Entity (NIE)
The NAMA Implementing Entities (NIEs) constitute the main operational body of the NAMA in the energy
sector of Kenya. Two specialized NIEs will manage their respective areas, the technical NIE will manage the
technical capacity development of the NAMA including MRV and the financial NIE will manage the financial
flows from the funding entities to the beneficiaries as well as approval of eligible private sector participants.
The main tasks of the technical NIE are to:
■ Be responsible for the overall technical implementation of the NAMA activities over the life span of the
NAMA;
■ Oversee the successful establishment and operationalization of the 28 EPZs across Kenya in pre-
determined locations;
■ Act as the key point of contact for all queries and communications with the NAMA stakeholders,
particularly the NEEs (NAMA Executing Entity);
■ Provide capacity development for institutions and private sector participants involved in the
implementation of the NAMA;
■ Coordinate promotion and awareness campaigns about the Clean Energy NAMA;
■ Coordinate and compile data—particularly the indicators described in Section 6.4 on NAMA Targets and
in line with the SD Tool;
■ Ensure that outcomes are in line with the SDGs and INDCs;
■ Prepare reports to the NCA in coordination with the financial NIE for MRV of GHG emission reductions
and SD impacts.
The MRV (Measurement Reporting and Verification) activities will be undertaken by a dedicated MRV Cell
established within the technical NIE.
Technical NIE - Rural Electricity Authority (REA) / NERA:
The Rural Electrification Authority (REA), mandated to be changed into the National Electricity and
Renewable Energy Authority (NERA) and be made responsible for all renewable energy activities in Kenya
excluding geothermal and large hydro is the designated technical NIE. The REA is a corporate institution set
up under the MOEP and is therefore ideally placed to coordinate the activities
The stated mandate of the REA is to accelerate the pace of rural electrification in order to promote
sustainable socio-economic development. The REA presently undertakes the following functions:
■ Manage the Rural /electrification Programme Fund;
■ Develop and update the rural electrification master plan;
■ Promote the use of renewable energy sources including small hydro, wind, solar, biomass, geothermal,
hybrid systems and oil fired components taking into account specific needs of certain areas including
the potential for using electricity for irrigation and in support of off-farm income generating
activities;Implement and source of additional funds for the rural electrification programme;
■ Manage the delineation, tendering and award of contracts for licenses and permits for rural
electrification.
At present, the REA is the only technically competent organization in Kenya which has an in depth
understanding of the rural energy landscape in Kenya. From the above activities, it can be noted that the
REA currently has the resources and manpower to undertake activities related to financial management,
implementation of projects over a long duration, promotion of the use of various renewable energy sources,
sourcing of additional finance and experience with contractual matters and implementation—all essential
elements for implementing a NAMA.
Moreover, the National Energy Policy of Kenya, 2014 has proposed to transform the REA into a National
Electrification and Renewable Energy Authority (NERA) to be the lead agency for development of all
renewable energy resources in Kenya other than geothermal and large hydro. ( (GoK_NEP, 2014) (p. 5). In
addition, policy states that NERA will formulate cooperation arrangements with local County Governments
for implementation of rural electrification and renewable energy programmes. (p. 8). The policy also notes
that NERA will be the “one stop shop” for information and guidance to investors on renewable energy
projects. (p. 68)
Apart from strengthening REA into NERA, the energy policy calls for revitalizing the existing MOEP Energy
Centers and establishing others to cover all 47 counties with a view to promoting renewable energy use. This
is of particular importance in the context of this NAMA as the proposed EPZ Model builds on the existing
Energy Centers.
In addition to the proposed changes to the REA, the policy proposes setting up an inter-ministerial
Renewable Energy Resources Advisory Committee (RERAC) to advise the GoK and the Cabinet secretary on
among others:
■ Criteria for allocation to investors of energy resource areas;
■ Licensing of Renewable Energy resource areas;
■ Management and development of other energy resources such as agricultural and municipal waste,
forests, and areas with good wind regimes, tidal and wave energy.
Contact Information of REA: Regional Offices of REA:
Kawi House - South C, Rift Valley Regional Office

Redcross road behind Boma Hotel. Giddo Plaza, Room No. 29, Goerge Morara Rd.
Nairobi P.O. Box 34585 – 00100 KENYA P.o. Box 16662 – 20100
Phone: +254 20 4953000/3600 Nakuru
Fax: +254 20 2710944
Mobile: 254 728 482 987 / +254 728 482 981 Nyanza Regional Office
Web: http://www.rea.co.ke Kondele (carwash) - Kibos road
P.o. Box 2604- 40100
Kisumu
Mt. Kenya Regional Office

Advocate plaza, 1st floor
off Kamakwa Road,
P.o. Box 1970
Nyeri
West Kenya Regional Office

Kiptagich House, 9th floor,
off Uganda Road
P.o.Box 3015- 30100
Eldoret
Coast Regional Office

Mariakani,
P.o Box 505
Mombasa
Financial NIE
The financial NIE is responsible for all NAMA finance- related activities, primarily dealing with the distribution
of loans and grants to private sector participants and end-consumers. The main tasks of the financial NIE are:
■ The approval process with regard to submissions of project applications and disbursement of funds (in
close collaboration with the technical NIE and NCA);
■ Approving and updating eligibility criteria of interventions;
■ Selecting experts to implement the capacity development measures as appropriate;
■ Ensuring proper transfer and disbursement of funds from the donors to the recipients based on an
agreed set of criteria;
■ Preparing reports to NCA/donors in coordination with technical NIE for use of funds;
■ Cooperating with financial internal and external auditors. A Trustee (typically appointed either by
the international donor or selected from within the countries financial/regulatory institution) will be
appointed as the financial NIE.
8.2.4 NAMA Executing Entities (NEEs)
The NAMA Executing Entities (NEEs) are the private sector actors (businesses, cooperatives etc.) that will
be responsible for manufacturing, assembly, promotion and distribution of the clean energy technologies
prioritized under the NAMA. Most of the NEEs will operate from the EPZs and will participate in one of the three
EPZ Business Models. Though a single private sector entity can participate in all the three business models, the
number of individual NEEs can be categorized into the following, based on the type of business model:
Table 16: Number of new business enterprises / NEEs by Business Model type
Type of NEE and EPZ Business Model No. of NEEs No. of NEEs
EPZ-L EPZ-S
EPZ Business Model 1: NEE responsible for establishing and operating 8 20
the physical infrastructure of EPZ including solar plant)
EPZ Business Model 2: NEE responsible for establishing the 8 --
manufacturing units for clean energy technologies
EPZ Business Model 3: NEE responsible for establishing the 8 20
distribution system for clean energy technologies
Total no. of NEEs / individual businesses 24 40
Each NEE will:
■ Operate the EPZ, manufacture/assemble and/or distribute the NAMA prioritized technologies in
compliance with the rules of the intervention;
■ Undertake appropriate marketing campaigns and awareness creation campaigns (e.g. community level
project demonstration etc.);
■ Align activities with the set criteria and operating guidelines of the NCA and NIE (e.g. meet the stated
quality standards);
■ Coordinate the activities with financial institutions to ensure that finance is made available to end
consumers and NEEs as appropriate;
■ Inform the NIE about the performance of the activities as required;
■ Collect data for MRV purposes (as per requirements of the MRV Cell).
The members of the Clean Cookstoves Association of Kenya (CCAK) and the Kenya Renewable Energy
Association (KEREA) will constitute a significant proportion of the NEEs. The CCAK KNAC is a national
association of clean cookstove and fuel stakeholders that strives to build solidarity amongst its members
and to create effective partnerships to ensure that the use of clean cookstoves and fuels is the norm in
Kenyan households and institutions. The KEREA is an independent non-profit association dedicated to
facilitating the growth and development of renewable energy business in Kenya.
8.3 Implementation schedule

The implementation of the NAMA will be carried out in five main steps. As an initial step, the institutional
structure for NAMA implementation will be established. In parallel, the capacity of the coordinating
and managing entity staff will be developed and awareness at the community level will be built. Upon
accomplishment of the aforementioned steps, implementation of the two interventions will start. The
following section gives details of each of the five steps.
Technical Life Span of the NAMA:
The proposed lifespan of the NAMA is 14 years from 2017 until 2030.
Step 1: Establish and operationalize the institutional structure for NAMA implementation
It is suggested that implementation should start with an initial meeting of a NAMA Technical Working Group,
which is to act as a kind of temporary supervisory board for the NAMA. Under this step, two main tasks will
be accomplished.
■ First a technical consultant will be appointed (Refer Section 8.1.3).
■ Second, the consultant will be responsible for appointing staff and establishing the NCA and NIE. Both
tasks will be accomplished in the initial year of NAMA project initiation, which is currently expected to
be 2017.
Step 2: Develop the capacity of the stakeholders
To ensure the overall success of the NAMA, the capacity of the relevant stakeholders needs to be built. The
capacities mainly pertain to the institutional set-up, namely the NCA, NIE and financial institutions and
awareness creation for private sector participants to participate in the three EPZ Business Models. Therefore,
under this step, various trainings would be conducted along with the marketing and awareness campaign
(Section 8.2.2). For example, trainings for the coordination and management entity’s staff, private sector
investors or commercial banks would be conducted in the initial phase of NAMA implementation.
Step 3: Implementation of Intervention 1
Once the institutional structure has been operationalized and the capacity of the relevant stakeholders has
been built, implementation of Intervention 1 will start. Under this step, a financial trustee will be appointed
and thereafter funds will be secured from national and international sources.
The national sources involve the funds coming from the national budget. The potential international sources
of funds involve funds coming through the NAMA support facility, the Global Environmental Facility (GEF),
the Green Climate Fund (GCF), the Japan International Cooperation Agency (JICA), or through the various EU
climate related funds. The implementation plan will be kick started by presenting the technical feasibility study
and the 28 EPZs are expected to be operationalized within the first three years of the NAMA (i.e. 2017-2019)
Meanwhile, the quality standards for technologies considered under the NAMA will be made publicly
available and other policy measures (e.g. a policy/mechanism for return of goods after end of its technical
life span) can be developed in parallel.
Step 4: Implementation of Intervention 2
Once the institutional structure has been operationalized, the capacity of the relevant stakeholders has been
built, and the manufacturing of the first batch of clean energy technologies initiated, the implementation of
Intervention 2 will start.
Under this step, a revolving fund () facility will be capitalized and activated to ensure that finance is available
to the end consumers at the point of purchase. Moreover, the public procurement scheme can focus on
securing 100 per cent of the manufactured units in the initial years until the market conditions are suitable
for direct sale of technologies.
Step 5: MRV is operationalized
The final step in operationalizing the NAMA is activating the MRV Cell. This will involve appointing staff
in eight of the EPZ-L, setting up appropriate infrastructure (e.g. computers with internet connection and
appropriate logistics tracking software) and training of staff for collection of appropriate data from NEEs.
Apart from tracking the progress of the NAMA outcomes, the MRV will provide crucial information to the
NCA and NIE to improve on the deliverables of the NAMA activities.
Figure 7: The Implementation Cycle of the NAMA

84 NAMA FINANCE
9 NAMA FINANCE
This chapter provides details about the financial requirements for the NAMA and the financial mechanisms
which will be used in the NAMA. First, the financial requirements for the technical interventions will be
described, followed by the financial requirements for capacity development. Then, the mechanisms for
national and international finance will be described in terms of sources and distribution mechanisms.
Finally, indicative NAMA finance needs and the financing provided via the different mechanisms will be
detailed. It should be noted that costs are described in light of the 14 year (2017-2030) lifetime of the NAMA,
not the lifetime of the interventions and measures, which may extend beyond the NAMA lifetime.
9.1 Overview of NAMA Finance

This section provides an overview of the total financing required from national and international sources for
implementing the NAMA, based on the specific interventions and measures. The table summarizes the key
categories of finance tackled in this chapter:
Table 17: Summary table for NAMA Finance – Interventions
No. Interventions Description Amount Relevant

(US$) Section
1 Establish 28 EPZs Total loans accessed by NEEs for setting up the 3 3,380,000 10.2.1
types of EPZ business models
2 500 kWp of PV Grants for setting up PV Power Plant 1,250,000 10.2.2
3 1 million PV lanterns 20% distributed under the Public Procurement scheme (see Table 18) and
+ 1 million ICS 80% (or 800,000 Units) distributed through direct sales by end-consumer
distributed financing (i.e. Revolving Loan Fund)
800,000 PV lanterns + Equity contribution by end-consumers 8,000,000 10.3.1
800,000 ICS Units
Financed by the Revolving Loan Fund 8,400,000 10.3.2
The direct sales of 80 per cent of the units is considered under Interventions for Finance while the sale of 20
per cent under Public Procurement is considered as a Measure because the latter is intended to facilitate the
development of a consumer market for direct sales
The following table on Measures should be read in conjunction with Chapter 8 on Capacity development
Measures.
Table 18: Summary table for NAMA Finance Measures
No. Measures Description Amount Relevant

(US$) Section
5 Technical One time grant to cover the cost of 50,000 10.4.1
Feasibility Study consultancy for undertaking the technical
feasibility study
6 Quality Standard Standards already exist hence no additional 0 --
finance is considered under the NAMA
7 NAMA Marketing Costs related to raising awareness about the 54,000 10.4.1
and Awareness NAMA (Year 1 only)
Creation
8 NCA and technical Total cost for appointing a national technical 300,000 10.4.1
NIE consultants consultant and a business consultant for 3
years
9 Financial Trustee Allocation for the financial trustee to operate 125,000 10.4.1
the Financing facility
10 Public Procurement Financing for offtake of 200,000 PV lanterns 8,000,000 10.4.2
and ICS
11 NCA and NIE Staff Salaries and Operating cost for NAMA lifespan 2,500,000 10.4.3
9.2 NAMA Finance required for Intervention 1

The financial requirements for Intervention 1 are for establishing the 28 large, medium and small EPZs
across Kenya with their own solar PV power plants with a total capacity of 500 kWp. The financing required
for intervention 1 can be categorized into two broad categories:
■ The loans required for setting up individual businesses as per the EPZ Business Models;
■ The grants required for solar PV power plant.
9.2.1 Loans for EPZ Business Model
The financing required for EPZs needs to be categorized by EPZ type (i.e. EPZ-L and EPZ-S) and the type of
business activity pursued (i.e. EPZ Business Models 1, 2 or 3). It is also assumed that not all 28 EPZs will be
set up in Year 1 but spread over the initial years of the NAMA. The table below provides an overview of the
proposed number of EPZs set-up by type and business model:
86 NAMA FINANCE
Table 19: Indicative start year for EPZ implementation
EPZ Biz. Model 1 EPZ Biz. Model 2 EPZ Biz. Model 3
Year EPZ-L EPZ-S EPZ-L EPZ-S EPZ-L EPZ-S

2017 2 4 2 - 2 4
2018 - 4 - - - 4
2019 4 4 4 - 4 4
2020 - 4 - - - 4
2021 2 4 2 - 2 4
Total 8 20 8 0 8 20
Note: The total number of EPZs set up is 28 (8 EPZ-L and 20 EPZ-S) which is in line with Intervention 1. Based on
the three types of EPZ Business Models, the total number of new business enterprises or NEEs established is 64,
which contributes to Kenya’s SDGs.
For the purpose of loans availed under the NAMA, the following assumptions have been made:
■ Loans for EPZ-L: Biz Model 1: US$ 100,000

■ Loans for EPZ-S: Biz Model 1: US$ 50,000
■ Loans for EPZ-S: Biz Model 3: US$ 25,000
The basis for the loan rests on initial stakeholder feedback received for establishing comparative business
in Kenya. However, due to the numerous variables involved (e.g. the cost of land acquisition, the cost of
construction, procurement of equipment and machinery etc.), an indicative loan amount was recommended
with the balance to be covered by the participating private sector entity as an equity contribution. The
approach allows the amount of finance required under the NAMA to be fixed and independent of the on-
ground variables (e.g. cost of land, construction, materials etc. which can vary from place to place).
Based on the loan values assumed and the total number of EPZs and enterprises, the table below
summarizes of the total amount of loans accessed under the NAMA:
Table 20: Summary table for Loans required for EPZ and Business Models
In US$ EPZ Biz. Model 1 EPZ Biz. Model 2 EPZ Biz. Model 3
2017 200,000 200,000 200,000 - 70,000 100,000
2018 - 200,000 - - - 100,000
2019 400,000 200,000 400,000 - 140,000 100,000
2020 - 200,000 - - - 100,000
In US$ EPZ Biz. Model 1 EPZ Biz. Model 2 EPZ Biz. Model 3
2021 200,000 200,000 200,000 - 70,000 100,000
Total 800,000 1,000,000 800,000 - 280,000 500,000
US$ 3,380,000
Potential Source(s) of Finance:
The finance required for setting up EPZs is a loan component and can be financed through international donor
finance. Alternatively, organizations such as Yunus Social Business (http://www.yunussb.com/) can be approached
to finance individual private sector participants on a case to case basis to establish a “social business” model.
9.2.2 Grants for Solar PV Power Plant
Energy is the key driver for economic growth, but in the case of solar power, the cost of electricity per unit
(i.e. US$/kWh) continues to remain relatively high compared withconventional sources. As the commercial
activities in the EPZ business models—primarily the manufacture and distribution of clean energy
technologies—will be heavily influenced by the input cost of electricity, it is proposed that the cost of
procuring the PV technologyis covered by international grant finance.
A grant based model will have a direct impact on the final selling price of the clean energy technologies
manufactured in the EPZs by making them affordable to the end-consumers and thus having a positive impact
on the overall objective of the NAMA. As the cost of solar PV has been constantly reducing and for the purpose
of authenticity, a UK Government supported website, https://www.gov.uk/government/statistics/solar-pv-cost-
data, has been used as the basis for determining the cost of PV. The installed cost of PV power plant including
operation and maintenance for a period of two years is estimated at US$ 2,500/kWp (UK_Gov_PV, 2015).
Considering the EPZ implementation as elaborated in Table 19 and a capacity of 50kWp for EPZ-L and 5kWp
for each EPZ-S, the table below summarizes the total capacity of solar PV installed in kWp and the finance
required in the form of grants based on the cost estimations stated above. The total grant component is
finance required for 500kWp of PV which is in line with Intervention 1, Outcome 2 of the NAMA.
Table 21: Summary table for Grants required for PV Power Plant
Grants for Solar PV (US$) Capacity Installed

Year EPZ-L EPZ-S EPZ-L EPZ-S
2017 250,000 50,000 100 kWp 20 kWp
2018 - 50,000 20 kWp
2019 500,000 50,000 200 kWp 20 kWp
2020 - 50,000 20 kWp
2021 250,000 50,000 100 kWp 20 kWp
Total 1,000,000 250,000 400 100
US$ 1,250,000 500 kWp
88 NAMA FINANCE
The finance required for setting up EPZs is a grant component and can be financed through international
donor finance. Alternatively, organizations such as IRENA-Abu Dhabi Fund for Development (ADFD) (http://
adfd.irena.org/funding.aspx) can be approached by the GoK to receive loans at a subsidized rate (1-2%) for a
period of 20 years.
9.3 Consumer Finance for Intervention 2

The financial requirements for Intervention 2 depend on making consumer finance available to end-
consumers to facilitate the uptake of clean energy technologies. This is one of the two objectives of the
NAMA and supports the creation of a market environment that will promote the development of a local
industry for clean energy technologies in Kenya, enable overall sustainable development in addition to
emission reduction from the use of the technologies and ultimately drive the transformation of the clean
energy sector for rural households.
As the number of units for both types of technologies are identical (i.e. Items 3 and 4), the financing model
(i.e. the total amount of grants and loans) is identical. The section however is divided into two parts to reflect
the two sources of finance:
■ End-consumer – Equity Contribution
■ End-consumer – Revolving Loan Fund
9.3.1 End Consumer – Equity Contribution
As 20 per cent of 1 million units are expected to be distributed under a public procurement scheme, the
balance of 80 per cent or 800,000 units each for PV lanterns and ICS are expected to be available for direct
sale to end-consumers. The table below provides an indication of the number of units expected to be
distributed over the NAMA lifespan.
Table 22 can be viewed in conjunction with Section 7.3 which discusses the proposed distribution of 1
million units.
Table 22: The proposed distribution of clean energy technologies by year (i.e. direct sale)
EPZ-1 EPZ-2 EPZ-3 EPZ-4 EPZ-5 EPZ-6 EPZ-7 EPZ-8 Total

2017 — — — — — — — — —
2018 — — — — — — — — —
2019 — — — — — — — — —
2020 5,000 5,000 — — — — — — 10,000
2021 5,000 5,000 — — — — — — 10,000
EPZ-1 EPZ-2 EPZ-3 EPZ-4 EPZ-5 EPZ-6 EPZ-7 EPZ-8 Total

2022 5,000 5,000 5,000 5,000 5,000 5,000 — — 30,000
2023 15,000 15,000 5,000 5,000 5,000 5,000 — — 50,000
2024 15,000 15,000 5,000 5,000 5,000 5,000 5,000 5,000 60,000
2025 20,000 20,000 20,000 20,000 20,000 20,000 20,000 20,000 160,000
2026 20,000 20,000 20,000 20,000 20,000 20,000 20,000 20,000 160,000
2027 20,000 20,000 20,000 20,000 20,000 20,000 20,000 20,000 160,000
2028 20,000 20,000 20,000 20,000 20,000 20,000 20,000 20,000 160,000
Total 125,000 125,000 95,000 95,000 95,000 95,000 85,000 85,000
800,000 Units (each for PV lanterns and ICS respectively)
A survey of relevant clean energy technology websites (e.g. Global Alliance for Clean Cookstoves for ICS and
Lighting Global for Solar PV lanterns) reveals that there are several models of the two types of clean energy
technologies currently available in the market at various price ranges and technical specifications. For the
purpose of this NAMA, the price of both technologies was considered at US$ 25 per unit and is considered
realistic based on the price information available on the websites.
The equity contribution (or down payment) by the end-consumer is targeted to be a minimum of 20 per
cent of the total price, i.e. US$ 5 per unit. The balance for the purchase of clean energy technologies will be
financed through consumer financing or loans. The table below summarizes the expected grant and equity
contribution based on these assumptions.
Table 23: The equity and loan components for 800,000 Units
Year Total Units by year Selling Price @ Equity Contribution @ Consumer Loan @
US$ 25 per Unit US$ 5 per Unit US$ 20 per Unit
A (Table 22) B = A x US$ 25 C = A x US$ 5 D = B-C
2017 — — — —
2018 — — — —
2019 — — — —
2020 10,000 250,000 50,000 200,000
2021 10,000 250,000 50,000 200,000
2022 30,000 750,000 150,000 600,000
2023 50,000 1,250,000 250,000 1,000,000
2024 60,000 1,500,000 300,000 1,200,000
2025 160,000 4,000,000 800,000 3,200,000
2026 160,000 4,000,000 800,000 3,200,000
90 NAMA FINANCE
Year Total Units by year Selling Price @ Equity Contribution @ Consumer Loan @
US$ 25 per Unit US$ 5 per Unit US$ 20 per Unit
A (Table 22) B = A x US$ 25 C = A x US$ 5 D = B-C
2027 160,000 4,000,000 800,000 3,200,000
2028 160,000 4,000,000 800,000 3,200,000
Total 800,000 20,000,000 4,000,000 16,000,000
The section below summarizes the equity contribution and loan requirements for both types of clean energy
technologies combined (i.e. PV lanterns and ICS):
■ Total number of Units: 1,600,000;
■ Total value of loans required: US$ 32,000,000 (US$ 32 Million);
■ Total equity contribution: US$ 8,000,000 (US$ 8 Million)
9.3.2 End Consumer—Revolving Loan Fund
The second component of the consumer finance deals with the consumer loan element, amounting to
US$ 32 million and represents the consumer financing extended to end- consumers through commercial
loans for purchase of technologies, over and above the consumer equity contribution. The total amount
of financing required over the lifespan of the NAMA will be lent through a financing model known as a
Revolving Loan Fund.
Figure 8: Schematic Representation of the Revolving Loan Fund

The concept of Revolving Loan Fund (RLF) as highlighted in the diagram above works by establishing a
financing facility with a local bank (with the monies being made available by international donors for the
purpose of this NAMA). The amount of donor finance parked with the local bank is not the total loans
required (e.g. US$ 32 million) but the loan expected to be distributed in a given year. The “revolving” nature
of the loan fund works by re-circulating the principal and interest paid back by end-consumers to fund
additional loans in the subsequent years. As the loans extended are relatively small amounts (US$ 20),
the repayment is assumed to happen over 2 years at an interest of 25 per cent, which is similar to other
microfinance schemes.
The table summarizes the actual volume of loans required over the entire duration of the NAMA and the
annual donor finance to replenish the loan fund.
Table 24: Loan pay back required for 1.6 Million Units (Table 22 provides values for 800,000 Units)
Year No. of (A) Loan (B) Total loan Required (C) Loan (D) Loan Repaid
Units Distributed at Pay Back including Repaid in in Yr 2
(Refer US$ 20 per Unit 25% interest Yr 1 (B) x 50%
Table 22.) (Principle) (Ax1.25) (B) x 50%
2017 — — — — —
2018 — — — — —
2019 — — — — —
2020 20,000 400,000 500,000 — —
2021 20,000 400,000 500,000 250,000 —
2022 60,000 1,200,000 1,500,000 250,000 250,000
2023 100,000 2,000,000 2,500,000 750,000 250,000
2024 120,000 2,400,000 3,000,000 1,250,000 750,000
2025 320,000 6,400,000 8,000,000 1,500,000 1,250,000
2026 320,000 6,400,000 8,000,000 4,000,000 1,500,000
2027 320,000 6,400,000 8,000,000 4,000,000 4,000,000
2028 320,000 6,400,000 8,000,000 4,000,000 4,000,000
2029 — — 4,000,000 4,000,000
2030 — — — 4,000,000
The potential risk for donors are the loan defaults, i.e. the inability of a certain proportion of the end-
consumers to pay back the loan, which is estimated at 10 per cent annually and is typical of microfinance
schemes. This loan default amount will need to be factored in by the donors as additional finance that will
need to be ”topped up” on annual basis. The table below provides an overview of the total loans repaid and
the loan defaults to provide the estimated donor financing required for the Financing Facility. It is important
to note that the numbers are indicative and are based on the assumptions made for the total number of
units sold annually. The negative values indicate the amount of surplus money that can be used to pay back
to international donors.
92 NAMA FINANCE
Table 25: Actual NAMA Finance Required annually for 16 Million Units
Year ELoan Repaid (C+D) F Loan Default (10% of E) (G) Donor Finance Required
A-(E+F)
2017 — — —
2018 — — —
2019 — — —
2020 — — 400,000
2021 250,000 25,000 175,000
2022 500,000 50,000 750,000
2023 1,000,000 100,000 1,100,000
2024 2,000,000 200,000 600,000
2025 2,750,000 275,000 3,925,000
2026 5,500,000 550,000 1,450,000
2027 8,000,000 800,000 -800,000
2028 8,000,000 800,000 -800,000
2029 8,000,000 800,000 -7,200,000
2030 4,000,000 400,000 -3,600,000
Advantage of the Revolving Loan Fund:
As can be observed from Table 25, using the concept of the Revolving Loan Fund, the actual financing
required for the end-consumer finance averages around US$ 1.2 million (2020-2026) with a peak of US$ 4
million in 2025. The nature of the revolving loan fund allows the amounts of loan repaid to be re-used for
consumer loan in subsequent years and the donors can expect to be repaid by the end of the NAMA life
span.
The annual disbursement of finance required is significantly lower than the total loan value of US$ 32 million
and is estimated at US$ 8.4 million the sum total for the period 2020-2026.
Risk for Donors:
Under the above assumptions, the potential financial risk for donors is the loan defaults (assumed at 10 per
cent in the calculations) and will need to be borne by the donor or can be factored into the interest rate
calculations.
The finance required for setting up EPZs is a loan component and can be financed through international
donor finance. As the revolving loan fund model allows the financing extended as a loan to be recovered
towards the end of the NAMA life span, the model makes it attractive to international donor agencies (e.g.
KfW, DFID, USAID etc.)
The African Renewable Energy Fund (AREF): Nairobi is also the headquarters of the AREF with a market
capitalization of US$ 200 million. A dedicated renewable energy fund focused on sub-Saharan Africa, the
fund was set up in 2015 with contributions from the European Investment Bank, the Global Energy Efficiency
and Renewable Energy Fund (GEEREF), among other investors. The fund is managed by Berkeley Energy, a
fund manager focused on developing and investing in renewable energy projects in emerging markets.
(Additional Information: EIB and http://www.berkeley-energy.com/)
9.4 NAMA Finance Required for Measures

The NAMA Finance required for measures consists of three major category of activities:
■ Measures to initiate the NAMA implementation
■ Measures related to the Public Procurement Scheme
■ Measures related to annual operation of the NAMA
9.4.1 Financial Measures for initiating NAMA Implementation
Note: This section refers to Items 5, 6, 8, 9, 12 in the NAMA Finance summary table 17
The financial measures to start the NAMA include the following activities:
■ Item 5. Finance required to undertake the technical feasibility study
■ Item 6. Finance required for Quality Standard (no financing required hence not elaborated)
■ Item 8. Finance required for marketing and awareness creation
■ Item 11. Finance for hiring of two national consultants (three years)
■ Item 12. Finance required for financial trustee (three years)
Finance for Technical Feasibility Study: US$ 50,000 (lump sum)
The NAMA defines the 28 potential locations of the 28 EPZs, based on population data for each county. As noted in
Section 8.1.1, the technical feasibility study will require the appointment of a national consultant for a three- month
period to verify and update the population data with most current values available from the KNBS. In addition, the
consultant can make recommendations about potential locations for the EPZs within each EPZ and identify a list
of private sector actors who can be invited to participate in the EPZ business model. The feasibility study will be
initiated by the MOEP (NCA) and the finalized study will allow the NCA to initiate the implementation of the NAMA.
The technical feasibility study is a grant component and can be financed through international grant
finance. Alternatively, the GoK can approach Climate Technology Centre & Network or CTCN (the designated
94 NAMA FINANCE
technical focal point for UNFCCC under the Paris Agreement) through its National Designated Entity to
finance the study.
Finance for Marketing and Awareness Creation: US$ 54,000
Marketing and awareness creation is one of the objectives of the GoK as noted in the NEP 2014. The finance
required for NAMA marketing described in this section focuses only on Year 1 and consists of the following items:
■ 12 newspaper advertisements in a year at US$ 2,000 per advertisement
■ 200 minutes of radio advertisements at US$ 100 a minute
■ A lump sum amount of US$ 10,000 for other media (pamphlets etc.)
The marketing and awareness is a grant component can be financed through international grant finance.
Additional marketing and awareness creation in subsequent years can be financed through the national
budget as it contributes to the NEP.
Finance for hiring two National Consultants: US$ 300,000
The NAMA requires hiring of two national consultant a technical consultant as the first step in implementation
(See Sections 8.1.3 and 9.3), responsible for setting up the NCA and NIE and training staff for a period of three
years and a business consultant who shall be responsible for engaging with the private sector and ensuring
that the NAMA interventions are undertaken. The costs for hiring the consultants consist of salaries for a period
of threeyears and operating costs. The average annual cost per consultant is assumed at US$ 50,000 (i.e. US$
3,000 per month as salary plus operating expense of US$ 14,000/year for workshops, travel, computers etc.)
The hiring of the two consultants is a national contribution as it directly facilitates the development of
the energy sector as defined under the NEPP. At present the National Environment Trust Fund (NETFUND),
Kenya, is identified as the most suitable organization to finance this component. NETFUND) (http://www.
netfund.go.ke/index.php), a state corporation under the Ministry of Environment and Natural Resources,
is mandated to further the requirements of environmental management, capacity development,
environmental awards, environmental publications, scholarships and grants.
Finance for Financial Trustee: US$ 125,000
The financial trustee is an individual or team typically appointed by the international donor agency with
the overall responsibility for management and operation of the NAMA Finance (international grant finance
component). Under the NAMA, the trustee will be responsible for identifying local financial institutions,
training and supporting the implementation of the NAMA finance scheme as appropriate.
The finance is grant component and the financial trustee will be appointed by the donor agency with a cost
assumed at 10 per cent % of the total grant component.
9.4.2 Finance for Public Procurement
Note: This section refers to Item 7 in the NAMA Finance summary table 17
Finance for Public Procurement: US$ 8 Million
The concept and rationale behind the Public Procurement is elaborated in Section 8.2.1 and requires the
GoK to facilitate the purchase of 200,000 PV lanterns and 200,000 ICS at a pre-determined fixed rate, directly
from the manufacturers. The table provides the annual budget required to procure the units at an estimated
price of US$ 20 per unit.
Table 26: Estimated finance and number of units distributed under Public Procurement
Year Units Procured Finance required

2017 — —
2018 20,000 400,000
2019 20,000 400,000
2020 60,000 1,200,000
2021 60,000 1,200,000
2022 80,000 1,600,000
2023 80,000 1,600,000
2024 80,000 1,600,000
2025 — —
2026 — —
2027 — —
2028 — —
Total 8,000,000
The finance is grant component and can be financed through the national budget or through a combination
of international programmes that support the distribution of PV lanterns and cookstoves. For example,
a US based non-profit organization, One Million Lights footnote?(http://onemillionlights.org/) aims to
distribute a million PV lanterns to end-consumers in various countries through public donations received
from individual contributions. This financing scheme can be extended through CSR schemes for companies
interested in contributing directly to socio-economic development in Kenya and to the SDGs as part of their
corporate strategy.
96 NAMA FINANCE
Enabling Private Sector Finance through Strategic Corporate Sustainability Actions (CSA) and
Impact Investing
While there appears to be a good understanding of philanthropic CSR within business

organizations in Kenya, there is a lack of understanding and awareness of the Paris Agreement
and the SDGs and how they can potentially affect businesses in the coming years. An innovative
approach to building private sector capacity adapt towards a low carbon future is by undertaking a
strategic approach to Corporate Sustainability Actions or Strategic CSA
The concept of “Impact Investing” has been discussed in Section 7.5 and in pursuing Strategic CSA –
which combines elements of impact investing with the new global frameworks (i.e. Paris Agreement
and SDGs), businesses in Kenya take a pro-active approach to aligning socio-economic impact,
environmental benefits, and consistency with national and international priorities into business
strategy development.
Some of the more innovative companies in the world are taking advantage of an increasingly
connected and digital world to seek out business models drawing on the ideas of the “Circular
Economy” and “Internet of Things” which combine elements of Strategic CSA with elements of
information technology. These business models are challenging our very notion of markets,
ownership and business value proposition and moving us towards a more sustainable and shared
economy.
The figure below provides an overview of a strategic CSA model that allows the private sector
in Kenya to take advantage of the emerging “Opportunity Gap” arising from the new global
frameworks by integrating national priorities with elements of impact investing.
Figure 9: Schematic Representation of a Strategic CSA Model

9.4.3 Finance for NCA/NIE Staff
Note: This section refers to Item 11 in the NAMA Finance summary table 17
Salaries and Operating Cost of NCA / NIE Staff: US$ 2.5 Million
The NCA is the Ministry of Energy and Petroleum and the NIE is the REA, both funded by the national
budget. Hence the salaries and operating cost of the NCA and NIE staff will be directly borne by the GoK. The
points summarizes the key assumptions:
■ Two department directors: US$ 24,000 / year (total US$ 48,000/year)
■ Three managers: US$ 12,000/year (total US$ 36,000/year)
■ 12 support staff: US$ 6,000/year (total US$ 72,00 year)
■ Total number of years (2017-2030): 14 years
■ Total salaries: US$ 2,184,000
■ Operating expenses at 15 per cent: US$ 327,600
■ Grand Total: US$ 2,511,600 (approx. US$ 180,000 annually)
9.5 Summary of Financial Requirements

The chart below summarizes the annual financial requirement of the NAMA. One component that is
constant for the entire duration of the NAMA is the salary and operating cost of the staff. The initial years
of the NAMA has loans and grants required to establish the technical interventions (i.e. the 28 EPZs with
500 kWp of solar power plants) along with supporting measures required to initiate the NAMA process (e.g.
the feasibility study, the national consultants etc.). As the manufacturing and distribution of clean energy
technology starts, the initial years are dominated by the public procurement scheme which supports
establishing a consumer- driven market supported by consumer finance.
98 NAMA FINANCE
Table 27: NAMA Finance Overview – Annual Values
Intervention - Loans
USD 4,500,000 Intervention - Grants
USD 4,000,000 Revolving Loan Fund
Public Procurement
USD 3,500,000 Other Measures
USD 3,000,000 Salaries & Operating Cost of NCA/NIE Staff
USD 2,500,000
USD 2,000,000
USD 1,500,000
USD 1,000,000
USD 500,000
USD 0
2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030
The table below summarizes the overall NAMA Finance required while indicating the potential sources of
financing as elaborated in this chapter.
Table 28: NAMA Finance Overview – Total Values
No. Key Financing Categories Description Amount Type

(Interventions and Measures) (US$)
1 Establish 28 EPZ Total loans accessed by NEEs 3,380,000 Loan
2a 500 kWp of PV Grants for setting up PV Power 1,250,000 Grant
Plant
2b Finance Trustee at 10% 125,000 Grant
3 800,000 PV lanterns and 800,000 Revolving Loan Fund 8,400,000 Loan
ICS distributed
4 Technical Feasibility Study One time lump sum grant 50,000 Grant
5 Marketing and Awareness One time lump sum grant 54,000 Grant
6 Public Procurement 200,000 PV National contribution in line 8,000,000 GoK*
lanterns and 200,000 ICS with reaching out to the
poorest of poor
7 Salaries & operating Cost of NCA/ Total amount spread over the 2,520,000 GoK
NIE staff life span of the NAMA
No. Key Financing Categories Description Amount Type

(Interventions and Measures) (US$)
8 Salaries and operating Cost for 2 Total amount spread over 3 300,000 NETFUND
national consultants years
Total 24,079,000
Of which
International Finance - Loan 11,780,000
International Finance - Grant 1,479,000
National Contribution including 10,820,000
innovative models*
* The public procurement can be funded through various innovative models such as Corporate
Sustainability Actions. and not necessarily by the Government of Kenya
In addition, the NAMA will also raise equity from end-consumers (US$ 8 million) and from private sector
participating in the EPZ Business Models.
100 NAMA MRV SYSTEM
10 NAMA MRV SYSTEM
The principal objective of the Measuring, Reporting, and Verification (MRV) system is to communicate
progress and provide credibility for any intervention and measure. This should be done in a manner that is
internationally comparable with the efforts of other parties to the UNFCCC, e.g. determining an appropriate
baseline approach and identifying the methodology for the estimation of the emission reductions.
The MRV system should establish the environmental integrity of mitigation actions and ensure that no
double-counting occurs. Further criteria are transparency, cost-efficiency, a sound institutional framework,
consistency, comparability, completeness and accuracy.
Given the overall NAMA concept and intervention for which support is sought, the GHG part of the MRV
system should be based on direct GHG emissions (i.e. combustion of fossil fuels and non-renewable
biomass) by monitoring. The NAMA framework intends to promote the construction of EPZs equipped with
solar PV power plants and distribution of clean energy technologies (i.e. solar PV lanterns and ICS)
The aim of this section is to present the principles and general approach of the proposed MRV system,
including data requirements and monitoring procedures for the four dimensions:
■ GHG mitigation
■ Sustainable development benefits
■ Implementation and transformation process—Technical Interventions
■ Implementation and transformation process—Supporting Measures
The objective of MRV systems is to measure and ensure the effectiveness of the proposed intervention a and
measures, to check that they are meeting the required standards and expectations (and also as a proof for
the stakeholders) and to provide a credible and transparent approach for quantifying and reporting GHG
emission reductions. As the NAMA is an output-based supported programme, the results of implementing it
need to be considered in order to secure support and to ensure the sustainable success of the interventions.
Hence, the MRV system includes the following elements that need to be defined:
System boundary definition
The system boundary encompasses significant anthropogenic GHG emissions by sources under the control
of the project participants that are reasonably attributable to the NAMA interventions as a project activity.
Baseline Scenario
The baseline scenario is the scenario for a project activity that reasonably represents the anthropogenic
emissions by GHG sources as well as sustainable development that would occur in the absence of the
proposed project activity, i.e. the NAMA intervention. These are elaborated in Chapter 6 on Baseline
Information.
Monitoring procedures
The monitoring plan will define the parameters to be monitored based on the methodology followed to
determine the emission reduction. It will also include corresponding indicators for sustainable development
benefits, the financial management and the implementation status.
Reporting and verification
The reporting and verification process will define the reporting requirements and verification procedures
considering the methodology standards and stakeholder requirements.
10.1 Measurement
10.1.1 GHG Mitigation
Objective 1 of the NAMA is to enable the private sector to participate in the manufacturing and distribution
of the clean energy technologies in Kenya. Objective 2 is to create an enabling market environment that
encourages distribution of the clean energy technologies by the end users supported by an appropriate
financing model. Hence, the GHG emission reductions which will be achieved by the interventions, can be
calculated by comparing emissions of the implemented NAMA intervention (i.e. solar PV power plants, solar
PV lanterns and ICS) with the emissions under a baseline scenario in the absence of the NAMA interventions.
GHG methodology for determining emission reductions
As noted in Chapter 6 on Baseline Information, the following CDM methodologies have been used for
estimating the emission reduction calculations as summarized in the table below:
■ Solar PV Power Plant - CDM Methodology: AMS-I.A.
■ Solar PV Lantern – CDM Methodology: AMS.III.AR.
■ Improved biomass cook stoves – CDM Methodology AMS-II.G.

102 NAMA MRV SYSTEM
Emission Reduction
Following the approach described above, the emission reduction due to the NAMA interventions (500 kW
solar PV power plant capacity, 1 million solar PV lanterns and 1 million ICS) is calculated as shown in the
following table below.
Table 29: Estimation of emission reductions achieved under the NAMA (tCO2)
Year PV power plant PV lanterns ICS Total

2017 117 - - 117
2018 140 800 30,000 30,940
2019 409 1,600 60,000 62,009
2020 444 4,000 150,000 154,444
2021 584 6,400 240,000 246,984
2022 584 8,800 330,000 339,384
2023 584 12,800 480,000 493,384
2024 584 15,200 570,000 585,784
2025 584 20,800 780,000 801,384
2026 584 25,600 960,000 986,184
2027 584 25,600 960,000 986,184
2028 584 25,600 960,000 986,184
2029 584 12,800 480,000 493,384
2030 584 - - 584
TOTAL 6,950 160,000 6,000,000 6,166,950
Based on the 3 CDM methodologies, the emission reduction can be estimated for 2 interventions as follows:
ERy = BEy − PE y − LEy

Where:
ERy = Emission reductions in year y (tCO2)

BEy = Baseline emissions in year y (tCO2)
PEy = Project emissions in year y (tCO2)
LEy = Leakage emissions in year y (tCO2)
This NAMA consists of three components, namely solar PV power plants, solar PV lanterns and ICS.
Accordingly, the overall emission reduction is derived as followed:
ERtotal,y = ERPVPP,y − ERPVL,y − ERICS,y

Where:
ERtotal,y = Total emission reductions in year y achieved under the NAMA (tCO2)
ERPVPP,y = Emission reductions in year y from solar PV power plants (tCO2)
ERPVL,y = Emission reductions in year y from solar PV lanterns (tCO2)
ERICS,y = Emission reductions in year y from solar ICS (tCO2)
Baseline Emissions (Solar PV power plants)
Following the approach of AMS-I.A., the baseline emissions are calculated based on the generated electricity
times the emission factor for the baseline diesel generation system as per the equation below:
BEPVPP,y = EGPVPP,y × EFBL
Where:
BEPVPP,y = Total baseline emissions in the year y from solar PV power plants (tCO2)
EGPVPP,y = Annual electricity generation from solar PV power plants (MWh)
EFBL = Emission factor for baseline diesel generation system (0.8 tCO2/MWh)
As a simplification, technical distribution losses are not accounted for the calculation of emission reductions.
This is conservative.
Baseline Emissions (Solar PV lanterns)
Following the approach of AMS-III.AR. with the simplification of applying a default emission reduction per
lantern for the operation of one full year, the baseline emissions are calculated as follows:
t PVL,ID,i,y
BEPVL,y = ∑ × EFPVL,i,BL
Where:
365
BEPVL,y = Total baseline emissions in the year y from solar PV lanterns (tCO2)
t PVL,ID,i,y = Days of operation of lanterns with specific ID-Number and of type i in year y (d),
assumed at 365
EFPVL,i,BL = Emission reduction per lantern of type i per year of operation (0.08 tCO2/year)
Baseline Emissions (ICS)
Following the approach of AMS-II.G. with the simplification of applying a default emission reduction per ICS
for the operation of one full year, the baseline emissions are calculated as follows:
t ICS,ID,i,y
BEICS,y = ∑ × EFICS,i,BL
365
104 NAMA MRV SYSTEM
Where:
BEICS,y = Total baseline emissions in the year y from ICS (tCO2)
t ICS,ID,i,y = Days of operation of ICS with specific ID-Number and of type j in year y (d),
assumed at 365
EFICS,i,BL = Emission reduction per ICS of type j per year of operation (3.0 tCO2/year)
Project emissions under NAMA
In line with the above mentioned CDM methodologies, under the specific situation of the NAMA
interventions, the project emissions can be assumed to be zero.
■ As per AMS-I.A. project emissions are zero for solar PV power plants as long as no fossil fuel is used for
backup power supply.
■ As per AMS.III.AR. project emissions are zero as only renewable power sources (i.e. PV) are used for
charging the lanterns.
■ As per AMS-II.G. project emissions are zero under the circumstances of the intervention proposed under
this NAMA.
Leakage under NAMA
■ As per AMS-I.A leakage has to be considered if the energy generating equipment is transferred from
another activity. Such transfer is not applicable for the solar PV power plants.
■ As per AMS.III.AR no specific leakage1 has to be taken into account.
■ As per AMS-II.G leakage has to be considered for changes in usage of non-renewable biomass due to
the project implementation, transfer of equipment and switching from fuel wood to charcoal. Applying
a default value of baseline emissions on the basis of a registered CDM project takes into account the
leakage related to changes in non-renewable biomass. Transfer of equipment or change from fuel wood
to charcoal can be neglected under the proposed NAMA intervention.
To summarize, in line with the above mentioned CDM methodologies, in the specific situation of the NAMA
interventions, leakage can be assumed to be zero or is already covered by the selection and determination
of the applied default factors.
Key Parameters Needed
In order to determine the emission reduction as described above, the following parameters will be
monitored for the NAMA, related to the determination of the emission reductions:
1 A leakage factor of 1 has to be applied.

Data / Parameter: Capacity solar PV power plants

Data Unit: kWp
Description: Total peak capacity of solar PV power plants built at EPZs
Measurement Data records from EPZs including contracts for building solar PV power plants
criteria / means of
measurement
Frequency: Annually
Data / Parameter: EGPVPP,y

Data Unit: MWh
Description: Annual electricity generation from solar PV power plants
Measurement The data are derived from electricity meters at each PV power plant supplying
criteria / means of electricity to an EPZ.
measurement
Frequency: Continuously
Frequency: Annual
Data / Parameter: No. of solar PV lanterns

Data Unit: —
Description: Total number of solar PV lanterns produced/distributed
Measurement Data from records at manufacturers/distributers at EPZs
criteria / means of
measurement
Frequency: Annually
Data / Parameter: No. of ICS

Data Unit: —
Description: Total number of ICS produced/distributed
Measurement Data from records at manufacturers/distributers at EPZs
criteria / means of
measurement
Frequency: Annually
By using the default emission reduction per device for the solar PV lanterns and the ICS, it is possible
to reduce the monitoring parameters and the related effort to a minimum while offering a reliable and
conservative basis for the determination of emission reductions as long as the equipment is accepted by the
consumers and the quality standards applied will ensure operation of such a period.
106 NAMA MRV SYSTEM
10.1.2 Sustainable Development Benefits
This NAMA is designed considering sustainable development benefits in addition to GHG mitigation.
Sustainable Development (SD) co-benefits are considered a central element for climate finance and for
encouraging country ownership, as well as having an important impact on the long-term sustainability of
a NAMA. For this NAMA a number of sustainable development indicators have been selected, based on the
Sustainable Development Evaluation Tool (SD Tool) provided by UNDP.
The Sustainable Development Evaluation Tool:
The SD tool requires for each of the Interventions that an indicator (such as air pollution, biodiversity, health,
etc.) is selected, the impact is identified, an explanation on the chosen indicator be added , the effect (positive,
negative, both) be defined and that it be indicated whether monitoring is done. For the approach taken using
the UNDP’s SD Tool and additional information, see Section 6.3.2 under Baseline and NAMA targets.
Table 30: NAMA Targets (as per the SD Tool) tracked under the MRV
No. Domain Indicator Identified Impact Target Value
1 Environment Climate Change Reduced GHG Emission 6.17 million

Adaptation and Mitigation tCO2e
2 Livelihood of poor, poverty Total no. of clean 400,000 units
alleviation, peace energy technology (PV lanterns
units distributed to the + ICS)
Social “poorest of poor’”
3 Quality of employment Total no. of EPZs 28
established
4 Access to clean and Total no. of clean 2,000,000
sustainable energy energy units distributed units (PV
(all categories) lanterns +
ICS)
5 Growth and Empowerment of women Total no. of women 200 women
Development employed
6 Access to sustainable Total capacity of solar 500 kWp
technology PV power plant installed
7 Capacity development Total no. of training 16 per year
programs
8 Asset accumulation and Total no. of new 64 new
investments enterprises established enterprises
(all types of
Economic NEEs)
9 Job Creation (number Total no. of new jobs/ 400 new jobs
of men and women employment created
employed)
No. Domain Indicator Identified Impact Target Value
10 Policy and planning NAMA institutions NCA and NIE

established established
Institutional
11 Laws and regulation Loans / grants US$ 13.26
distributed million
10.1.3 Measurement—SD Parameters
The SD benefits achieved due to the NAMA interventions should be measured continuously, and reported
by the responsible technical NIE regularly. Hard copies or soft copies of the reports should be kept at a safe
centralized point, and be archived by the NCA. The tables below provide the indicators that need to be
monitored for SD, in line with the SD Tool:
Reference number: 1 (see SD Tool above)

Indicator Name Climate Change Mitigation
Domain Environment
Parameter Name GHG emissions (tCO2e)
Baseline Value As per section 6.2.2
Way of monitoring How Calculated in accordance with methodologies define in the
NAMA
Frequency Continuously
By whom MRV Cell and NEEs
Project Value 6.17 million tCO2e (rounded value)
QA/QC procedures QC check done Third party verification organization

Indicator Name Livelihood of poor, poverty alleviation, peace
Domain Social
Parameter Name Total no. of lanterns distributed to “poorest of poor”
Baseline Value 0
Way of monitoring How Tracked by MRV Cell at point of sale
Project Value 200,000 PV lanterns and 200,000 ICS
QA/QC procedures QC check done Third party verification organization through sale receipts
and random interview with beneficiaries
108 NAMA MRV SYSTEM

Indicator Name Quality of Employment
Domain Social
Parameter Name Total no. of EPZs established
Baseline Value 0
Way of monitoring How Tracked by NIE/MRV Cell based on approvals granted and
loans accessed
Frequency Monthly
By whom MRV Cell along with Financial Institution providing loans/
grants
Project Value 28 (8. EPZ-L and 20 EPZ-S)
QA/QC procedures QC check done Third party verification organization through total finance
accessed by NEE and physical verification of existing
infrastructure

Indicator Name Access to clean and sustainable energy
Domain Growth and Development
Parameter Name Total no. of lanterns distributed to all sections of society
Baseline Value 0
Way of monitoring How Tracked by MRV Cell at point of sale
Project Value 1,000,000 PV lanterns and 1,000,000 ICS
QA/QC procedures QC check done Third party verification organization through sale receipts

Indicator Name Empowerment of Women
Parameter Name No. of women employed
Baseline Value 0
Way of monitoring How Tracked by MRV Cell with NEEs based on employment
records
Frequency Annually
Project Value 200 (or 50% of total employment)
QA/QC procedures QC check done Third party verification organization through monthly salary
slips and random interview with staff

Indicator Name Access to sustainable technology
Parameter Name Total capacity of solar PV plant installed
Baseline Value 0
Way of monitoring How Tracked by NIE based on approvals granted and financial
grants accessed
Frequency Monthly
Project Value 500 kWp
infrastructure (i.e. solar plant)

Indicator Name Capacity development
Parameter Name Total no. of training programmes undertaken
Baseline Value 0
Way of monitoring How Tracked by MRV Cell and NEE based on physical evidence
(e.g. photos, attendance list of attendees etc.)
Frequency Annually
By whom MRV Cell and NEE
Project Value 16/year
QA/QC procedures QC check done Third party verification organization through random interviews
with participants and certificate of participation awarded.

Indicator Name Asset accumulation and investments
Domain Economic
Parameter Name Total no. of individual business created (no. of NEEs)
Baseline Value 0
Way of monitoring How Tracked by NIE/MRV Cell based on approvals granted and
loans accessed
Frequency Monthly
Project Value 64 new enterprises
infrastructure (i.e. office set up)
110 NAMA MRV SYSTEM

Indicator Name Job Creation
Domain Economic
Parameter Name Total no. of new employment created
Baseline Value 0
Way of monitoring How Tracked by MRV Cell with NEEs based on employment records
Frequency Annually
Project Value 400
QA/QC procedures QC check Third party verification organization through monthly salary
done slips and random interviews with staff

Indicator Name Policy and Planning
Domain Institutional
Parameter Name NCA and NIE established and operationalized
Baseline Value 0
Way of monitoring How Tracked by NIE based on staff employed within NCA
and NIE
Frequency Annually
By whom MRV Cell
Project Value 400
QA/QC procedures QC check done Third party verification organization through monthly
salary slips and random interviews with staff

Indicator Name Laws and Regulation
Domain Institutional
Parameter Name Total finance distributed by banks
Baseline Value 0
Way of monitoring How Tracked by MRV Cell with support from financial
institutions based on total loans / grants distributed
Frequency Monthly
By whom MRV Cell, financial institution and NEEs
Project Value US$ XX Mio
QA/QC procedures QC check done Third party verification organization through total
finance accessed by NEE and direct interviews with
beneficiaries (e.g. end consumers)
10.2 Reporting
The NAMA will establish the institutional system needed for the coordination, implementation and MRV
of the NAMA in the form of NCA, NIE and NEEs. The overall responsibility of the NAMA lies with the NCA
which is the Ministry of Energy and Petroleum and will be the key Ministry responsible for communication
of the MRV to the designated national focal points for national/sectoral level reporting (e.g. National
Communication or bi-annual reporting to UNFCCC or any new reporting requirements established under
the Post Paris Agreement). The day-to-day responsibility for data collection, data management, reporting
and verification will be undertaken through a dedicated ‘MRV Cell’ under the NIE. The NIE will therefore
be responsible for the overall management and ownership of the MRV process and for overseeing the
preparation of the annual MRV reports. The MRV Cell will delegate some tasks to the NEEs while be directly
responsible for coordinating with other NEEs for specific data sets.
Figure 10: Schematic overview of the MRV reporting structure

112 NAMA MRV SYSTEM
Three broad categories of data sets will be reported:
■ Information regarding the technical implementation (e.g. number of lanterns and ICS units sold
annually, electricity generated by the PV power plants). These data sets will directly contribute towards
estimation of GHG emission reductions.
■ Information regarding Sustainable Development Benefits including capacity development efforts

undertaken at EPZ level (e.g. the new employment created, women / youth employed, staff trained,
training programmes conducted, number of community demonstration projects etc.)
■ Information related to finance that will be directly provided by the participating financing entities
(e.g. loans / grants provided through local banks or financial institutions to private sector and end-
consumers). This information may be a specific requirement of international donors.
10.3 Verification
The NIE will implement a monitoring protocol that allows any third party verifier to verify all relevant data. A
NAMA monitoring database shall be established that contains all the specific data required. This database is
going to be operated and maintained by the NIE, potentially under supervision of the NCA.
Verification Procedures
As noted, the NIE will be responsible for the preparation of monitoring report(s) and for communication with
an appointed verifier during verification activities. The preparation of the monitoring reports, if required,
could also be outsourced to competent consultants or trained staff from within the MRV Cell.
Verification initiated by the NIE will occur for the baseline and the NAMA activities (e.g. sampling group).
The NIE will be responsible for the preparation of monitoring reports based on the monitoring records
and according to the methodology at least once every other year. The monitoring reports will aggregate
all required monitoring information, i.e. monitoring records, in order to allow third party verification. Each
monitoring report will unambiguously set out the data on emission reductions generation, SD impact, and
financial management during the monitoring period consistent with the requirements of this MRV system.
The objective of the verification is to have an independent third party auditor ensure that the NAMA is
operating as planned and that the measuring and reporting system is being implemented as planned. The
verification also ensures that emissions reductions and SD benefits are real and measurable. Auditors should
be accredited entities, such as under the CDM or under another accreditation system.
Verification should occur every one or two years. The verification will consist of:
■ Desk review of NAMA monitoring reports prepared by the NIE;
■ Site visits/interviews of key stakeholders;
■ Drafting of a verification report;
■ Providing feedback on the report by the NIE and the NA;

■ Finalization the verification report.
Quality Assurance Procedures
Use of the monitoring database, including monitoring and identification records, will ensure that double
counting of emission reductions.
The length, i.e. the start and end date of each monitoring period, together with the corresponding
monitoring records for that monitoring period, will be recorded in the database.
Record-keeping procedures undertaken by the NIE will ensure that the monitoring records attributed to
a monitoring period can be clearly attributed to the NAMA activities and will furthermore prevent double
counting of emission reduction data.
For data quality control, the data and information provided to the NIE will be checked internally to ensure
the accuracy and completeness of data. In the case of mistakes, corrective action will be applied to avoid
future similar mistakes. Subject to the requirements of the NA and the donor there might be additional
requirements of the MRV system, e.g. donors might wish to send their own QA/QC teams to check the NAMA
performance.
In order to assure quality of data handling, training will be provided to monitoring personnel. The NIE,
through the MRV Cell, will provide all necessary information and training material that enables every NEE to
conduct the monitoring process as required by the NAMA MRV system.
114 SECTION TITLE
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116 ANNEXES
ANNEXES
NAMA Summary
Overall Goal/Purpose of the NAMA:

Increase access to clean energy technologies (i.e. PV lanterns and improved cookstoves) in a sustainable
manner while leading to transformational change—particularly in the household energy sector in rural
Kenya.
Objectives, Technical Interventions and Physical Outcomes of the NAMA:
Objective 1: Enable the private sector to participate in the manufacturing and distribution of the clean
energy technologies in Kenya.
Intervention 1: Establish 28 Energy Productivity Zones in Kenya, each with its own PV- based electricity
power plant.
■ Outcome A: 28 EPZs are established in Kenya and operationalized
■ Outcome B: 500 kWp of Solar PV- based power plant implemented

Objective 2: Create an enabling market environment that encourages distribution of the clean energy
technologies through an appropriate financing model.
Intervention 2: Distribute clean energy technologies, enabled through consumer finance.
■ Outcome C: 1 million solar PV lanterns distributed
■ Outcome C: 1 million improved cookstoves distributed
Note: Since the activities for Outcome C are identical for both technologies (i.e. lanterns and cookstoves), the Log
Frame Analysis tackles this as a single Outcome
Outputs, Activities and Measures
Step 0: Preparatory Phase

Activities 0.1 Appointment of a National Technical Consultant To be undertaken by the MOEP
before the start of the NAMA
0.2 Environmental Impact Assessment of the NAMA To be determined before the
interventions if required for specific financing start of NAMA
application (e.g. GCF)
Outcome A: 28 EPZs are established in Kenya and operationalized

Output A.1: The National Coordinating Entity (NCA) and NAMA Implementing Entity (NIE) are
implemented and operating
0.1 The National Technical Consultant is Financial Measure (Salaries and
operationalized Operating Costs)
Activities A.1.1 NCA is defined, staffed and operationalized within Financial Measure (Salaries and
the MOEP Operating Costs)
A.1.2 NCA Staff are trained on relevant issues related to Capacity development
their role and responsibility under in the NAMA Measure (Institutional)
A.1.3 NIE is defined, staffed and operationalized Financial Measure (Salaries and
including the MRV Cell Operating Costs)
A.1.4 NIE Staff are trained on relevant issues related to Capacity development
their role and responsibility under in the NAMA Measure (Institutional)
Output A.2: Implementation Plan Approved
A.2.1 External consultant appointed to undertake Financial Measure (Cost of the
feasibility study Consultancy)
A.2.1 Implementation plan approved for pre-determined Capacity development
locations of 28 EPZs based on the feasibility study Measure (Systematic)
Output A.3: Awareness Creation for Private Sector Participants
A.3.1 A National Business Consultant is appointed and Financial Measure (Salaries and
operationalized Operating Costs)
A.3.2 Marketing and Awareness Creation through radio, Financial Measure (Year 1 only)
newspaper advertisements and use of other forms
of local media
A.3.3 Outreach to Private Sector Participants by the Capacity development
National Business Consultant including the Measure (Institutional)
development and communication of an Eligibility
Criteria and the 3 types of EPZ Business Models
Output A.4: Financing Facility Operationalized
A.4.1 Selection of financial institution (one or more Capacity development
as appropriate) as the Financial Trustee (FT) and Measure (Institutional)
agreement between the parties executed
118 ANNEXES
A.4.2 The Financing Facility is established and Financial Measure (Donor

operational under the FT, including setting up of finance)
the Revolving Loan Fund
(Facility consists of grants and loans as highlighted
for individual activities below)
Output A.5: 28 EPZs (EPZ Business Model 1—the physical infrastructure consisting of 8 EPZ-L and 20
EPZ-S) are constructed and made operational
A.5.1 Approvals granted to private sector participating Capacity development
in the EPZ Business Model Measure (Systematic)
A.5.2 Loans made available to Private Sector for Financial Measure (Financial
establishing EPZ (physical infrastructure) facility - Loans)
A.5.3 Annual training programme initiated Capacity development
Measure (Institutional)
Output A.6: 8 EPZs (EPZ Business Model 2—the manufacturing facilities) are established and made
operational
A.6.1 Approvals granted to private sector participating Capacity development
in the EPZ Business Model Measure (Systematic)
A.6.2 Loans made available to Private Sector for Financial Measure (Financial
establishing EPZ (manufacturing facilities) facility - Loans)
A.6.3 Annual training programme initiated Capacity development
Measure (Institutional)
Outcome B: 500 kWp of Solar PV based power plant implemented
Output B.1: Solar PV Power Plant of appropriate size based on the type of EPZs installed and made
operational totalling 500 kWp for 28 EPZs (i.e. 50 kWp each for 8. EPZ-L and 5kWp each for 20. EPZ-S)
B.1.1 Approvals granted for setting up standardized Capacity development
Solar PV Power plants in lieu with activity A.5.1 Measure (Systematic)
B.1.2 Grants made available to Private Sector for the Financial Measure (Financial
installation, operation and maintenance of the facility - Grants)
Solar PV Power plant
B.1.3 Annual training programme initiated in lieu with Capacity development
A.5.3 Measure (Institutional)
Outcome C: 1 million solar PV lanterns distributed
Outcome C: 1 million improved cookstoves distributed

Output C.1: 28 EPZs (EPZ Business Model 3—the distribution facilities) are established and made
operational
C.1.1 Approvals granted to private sector Capacity development Measure
participating in the EPZ Business Model (Systematic)
C.1.2 Loans made available to the Private Sector for Financial Measure (Financial
establishing EPZ (distribution facilities) facility - Loans)
C.1.3 Annual training programme initiated in line Capacity development Measure
with A.6.3 and MRV Cell Staff (A.1.4) (Individual)
Output C.2: 200,000 PV lanterns and 200,000 ICS distributed under the Public Procurement Scheme
C.2.1 Financial allocation for public procurement Financial Measure (National
under national budget (or an additional Contribution)
sources of finance is identified through
innovative models such as Strategic CSA)
C.2.2 Distribution of clean energy technologies by Capacity development Measure
EPZs to pre-defined groups of people (Individual)
Output C.3: 800,000 PV lanterns and 800,000 ICS distributed with support from the Consumer Financing
model
C.3.1 Financial allocation within the Financing Financial Measure (Financial
Facility for Consumer Finance through the facility Revolving Loan Fund)
Revolving Loan Fund
C.3.2 Distribution of clean energy technologies Capacity development Measure
through distribution facilities (Individual)
Financial Measures
Outcome A: 28 EPZs are established in Kenya and operationalized

Output A.1: The National Coordinating Entity (NCA) and NAMA Implementing Entity (NIE) are
implemented and operating
Description 0.1 The salaries and operating cost of the US$ 150,000
of finance National Technical Consultant for a period
required by of 3 years
Activity
A.1.1 Salaries and operating Cost of NCA staff for US$ 2,520,000
the technical life span of the NAMA
A.1.3 Salaries and operating Cost of NIE staff
including MRV Cell for the technical life
span of the NAMA
Output A.2: Implementation Plan Approved
A.2.1 The cost of appointing an external US$ 50,000
consultant to undertake feasibility study
Output A.3: Awareness Creation for Private Sector Participants
A.3.1 The salaries and operating cost of the US$ 150,000
National Business Consultant for a period of
3 years
A.3.2 The cost of marketing and Awareness US$ 54,000
Creation through radio, newspaper ads and
use of other forms of local media in Year 1
Output A.4: Financing Facility Operationalized
A.4.2 The total financing required for the US$ 13,030,000*
Financing Facility for the entire duration of (Refers to loans and grants for
the NAMA interventions and the revolving
loan fund—Sections A.5.2, A.6.2,
B.1.2, C.1.2, C.3.1 below)
120 ANNEXES
Output A.5: 28 EPZs (EPZ Business Model 1—the physical infrastructure consisting of 8 EPZ-L and 20.
EPZ-S) are constructed and made operational
A.5.2 Loans made available to Private Sector for US$ 1,800,000
establishing EPZ (physical infrastructure)
Output A.6: 8 EPZs (EPZ Business Model 2—the manufacturing facilities) are established and made
operational
A.6.2 Loans made available to Private Sector for US$ 800,000
establishing EPZ (manufacturing facilities)
Outcome B: 500 kWp of Solar PV based power plant implemented
Output B.1: Solar PV Power Plant of appropriate size based on the type of EPZs installed and made
operational totalling 500 kWp for 28 EPZs (i.e. 50 kWp each for 8 nos. EPZ-L and 5kWp each for 20 nos.
EPZ-S)
B.1.2 Grants made available to Private Sector for US$ 1,250,000
the installation, operation and maintenance
of the Solar PV Power plant
Outcome C: 1 million units of PV Lanterns and 1 million Units of ICS distributed
Output C.1: 28 EPZs (EPZ Business Model 3—the distribution facilities) are established and made
operational
C.1.2 Loans made available to Private Sector for US$ 780,000
establishing EPZ (distribution facilities)
Output C.2: 200,000 PV lanterns and 200,000 ICS distributed under the Public Procurement Scheme
C.2.1 Financial allocation for public procurement US$ 8,000,000
under national budget (or additional
sources of finance is identified through
innovative models such as Strategic CSA)
Output C.3: 800,000 PV lanterns and 800,000 ICS distributed with support from Consumer Financing
model
C.3.1 Financial allocation within the Financing US$ 8,400,000
Facility for Consumer Finance through the
Revolving Loan Fund
Empowered lives.
Resilient nations.
United Nations Development Programme

304 E 45th Street
New York, NY 10017, USA

Undp Lecb Kenya - Clean Energy NAMA 2016

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Empowered lives. Resilient nations.

Technical Oversight and Guidance

More information can be found at www.lowemissiondevelopment.org

Abbreviations and Acronyms 8

1.1 Setting the Context 12

2.1 Country Topography 16

3. Background to the Energy Sector 20

3.1 Renewable Energy Potential in Kenya 20

4. The Policy Environment in Kenya 28

4.1 Constitution of Kenya 28

4.4 National Climate Change Action Plan (NCCAP) 31

5. NAMA Baseline Information 36

5.1 The NAMA Boundary 36

6. NAMA Intervention – Private Sector-enabled Business Model 48

6.1 Energy Productivity Zones (EPZs)—The Change Agent 48

7.1 Capacity Development Measures for Intervention 1 61

7.2.1 Public Procurement Scheme 69

8.1 Governance and Management 74

8.3 Implementation schedule 81

9.1 Overview of NAMA Finance 84

10. NAMA MRV System 100

10.1 Measurement 101

NAMA Summary 116

Outputs, Activities and Measures 117

ABBREVIATIONS AND ACRONYMS

NCCRS National Climate Change Response Strategy

3. The Clean Energy Sector in Kenya

■ Sector Transformation: Spur development of an environment which facilitates transformation of the

■ Finance: Include a financial plan and management in sufficient detail.

1.1 Setting the Context

1.2 Nationally Appropriate Mitigation Actions

1.3 Clean Energy NAMA – An Opportunity for Kenya

Figure 1: A simple overview of the NAMA Outcomes

1.4 Purpose and Objectives of the NAMA

The two Objectives of this NAMA are:

With a population of 45 million and occupying Figure 2: Map of Kenya

Source: (Embassy_Kenya, 2016)

2.2 Country Administration

■ Involving the people in governance;

■ Allowing better supervision and implementation of policies at the grassroots level.

■ Exercising the powers of enacting laws at the county level;

■ Acting as a means of oversight of the county executive;

2.5 Socio-Economic Situation

Full name: The Republic of Kenya

3 BACKGROUND TO THE ENERGY SECTOR

3.1 Renewable Energy Potential in Kenya

Table 1: Renewable Energy Potential in Kenya (Ayieko, 2011)

No. Renewable Energy Potential Areas

No. Renewable Energy Potential Areas

3.2 Key Actors – Kenya Energy Sector

Ministry of Energy and Petroleum (MOEP): www.energy.go.ke

Energy Regulatory Commission (ERC): www.erc.go.ke

Kenya Power and Lighting Company / (KPLC): www.kplc.co.ke

Kenya Electricity Generating Company (KenGen): http://www.kengen.co.ke/

Geothermal Development Company (GDC): www.gdc.co.ke

Kenya Electricity Transmission Company (KETRACO): www.ketraco.co.ke

Independent Power Purchasers (IPPs):

National Environmental Management Authority (NEMA)

NEMA is responsible for enforcement of environmental laws and regulations.

Centre for Energy Efficiency and Conservation (CEEC):

3.3 Rural Electrification Authority (REA)

3.4 Analysis of Household Energy

■ High consumer tariffs due to operational inefficiencies and high taxes.

6.1 Energy Productivity Zones (EPZs)—The Change Agent