Kenya Electricity Generating Co., Africa’s largest geothermal producer, joined a United Nations-backed emissions-reduction program as it looks to begin a domestic carbon market.
KenGen, as the state-run company is known, announced its participation in the Business Ambition for 1.5°C program on Wednesday. Under the project, the company commits to emission-reduction targets through investments in green and clean energy to help combat global warming, as per the 2015 Paris Agreement guidelines.
The announcement bodes well for a plan by the company and the East African government to introduce carbon trading on the local bourse. Kenya is in the advanced stages of establishing a National Carbon Credits and Green Assets Registry, under which its emissions trading system will operate, National Treasury Secretary Ukur Yatani said last month.
The Capital Markets Authority and the Nairobi Securities Exchange held talks with KenGen to start carbon trading on the derivatives segment of the market this year.
“Our intention is to be able to sell the Certified Emission Reductions in the market by Dec. 2021, depending on demand,” Managing Director Rebecca Miano said in response to emailed questions.
KenGen is able to generate 1,803 megawatts of electricity, almost two thirds of Kenya’s installed capacity. Of that, 705.5 megawatts is geothermal energy produced by the company.
Six of KenGen’s projects, including geothermal, hydro and wind power plants, are registered under the Clean Development Mechanism, from which the UN aims to allow projects in developing countries earn emission-reduction credits. The company has recorded about $3.6 million in carbon revenue since it started registering its projects in 2010.