KENYA – The International Finance Corporation (IFC) and the Italian Climate Fund have announced a US$210 million investment in Eni S.p.A.’s Kenya subsidiary to expand the production and processing of advanced biofuel.
The fund will, in turn, support the decarbonization of the global transport industry and the livelihoods of up to 200,000 small-scale Kenyan oilseed farmers.
The investment consists of US$135 million from the IFC and US$75 million mobilized from the Italian Climate Fund, part of implementing the Italian Government’s Mattei Plan in Kenya.
It will help Eni S.p.A, an Italian multinational energy company, increase the production of advanced biofuel feedstock grown in Kenya and processing capacity by constructing new processing plants.
Oilseed production, the primary feedstock, is expected to increase from 44,000 tons to 500,000 tons annually.
“This project marks the dawn of a new industry for Kestry where Kenya could become a world leader,” said Makhtar Diop, IFC Managing Director.
“Producing biofuels will not only help decarbonize our transportation system, it will also generate income for farmers and create jobs along the value chain. We’re proud to partner with a company like Eni, which is leading the efforts to reduce the carbon footprint of the transport industry.”
The project will also work with farmers, providing inputs, mechanization, logistics, certification, and training to help them produce oilseeds. These seeds are grown on degraded land not suitable for food production and/or in rotation with food crops, helping enhance soil fertility.
“By partnering with IFC and the Italian Climate Fund, Eni further enhancesagreedifeed stock projects in Kenya, expanding its reach to up to 200,000 small-scale Kenyan farmers over the next five years, and strengthens the country’s integration in the biofuels value chain,” said Claudio Descalzi, Eni CEO.
“This cooperation with Eni’s model to leverage public-private partnerships to support communities, generate long-term value, and create virtuous, lasting alliances with African countries.”
Global biofuel demand has increased by nearly 6 percent annually for the last five years as the transport industry looks for decarbonizing solutions. In a net zero by 2050 scenario, the use of biofuels in transportation is expected to more than double to 9 percent by 2030.
While production of sustainable biofuels is currently more expensive than traditional fuels, costs are expected to fall as more capacity is built up and technology advances. This new investment will support these efforts.
IFC will also provide advisory services to support the development of the advanced biofuel value chain in Kenya, including promoting good agricultural practices and professionalizing farmer aggregators.
All ENI biofuel feedstock will receive International Sustainability and Carbon Certification (ISCC). ISCC is a globally recognized scheme for biofuels with rigorous environmental, social, and economic sustainability standards audited across the entire supply chain. The project’s success can open up opportunities for replication elsewhere in Africa.
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