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Germany Backs Kenya Hydrogen Among Africa Climate Pledges

(Bloomberg) -- Germany will announce €450 million ($486 million) of climate finance pledges at the inaugural Africa climate summit including backing the construction of a fertilizer plant in Kenya using green hydrogen.

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Europe’s largest economy will provide a €60 million loan for the Kenyan project in Olkaria, where geothermal energy could be used to split hydrogen from water molecules, providing fuel for the fertilizer plant. It will also cancel €60 million of debt owed to Kenya in exchange for the money being spent on renewable energy and climate-friendly agriculture, according to Barbel Kofler, state secretary to Germany’s economic cooperation minister.

“We see the big need of energy on the African continent for both the people already living here, but also for future investment, for future industry, for future building up jobs for a young continent,” Kofler said in an interview on Monday in Nairobi, where the conference is taking place.

Germany’s pledges come as wealthy nations are increasing spending for energy transition programs, at a time when African countries, who account for just 4% of the world’s greenhouse gas emissions but are among the hardest hit by climate change, are stepping up demands for more access to climate finance.

Germany, France, the US, UK and European Union are backing energy transition programs in South Africa and Senegal, the Netherlands is investing in green hydrogen in South Africa and Namibia and Spain is providing funding for renewable power plants in South Africa.

In addition to the two Kenyan initiatives, Germany will also boost its contribution to the Sustainable Energy Fund for Africa, overseen by the African Development Bank, by €40 million and will channel another €200 million concessional loan to South Africa’s coal-transition pact, or Just Energy Transition Partnership, according to information provided by Kofler. The so-called JETP is a landmark $8.5 billion deal with some of the world’s richest nations.

A hydropower project in Kenya and forestry projects in central Africa will also be supported.

(Updates with detail on JETP in sixth paragraph)

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