(Finance) – The International Finance Corporation (IFC) and the Italian Climate Fund they announced today an investment of 210 million dollars in the subsidiary Kenyan company of Eni SpA to expand the production and processing of advanced biofuelssupporting the decarbonisation of the global transport system while ensuring the livelihood of up to 200,000 small-scale Kenyan oilseed farmers.
The investment consists of 135 million dollars from IFC and 75 million dollars mobilized by the Italian Climate Fundas part of the implementation of Mattei Plan of the Italian government in Kenya. This will allow Eni to increase both production of advanced raw materials for biofuels (agrifeedstock) grown in Kenya both the capacity of processing through the construction of new pressing plants. It is expected that the production of oilseeds, which is the primary raw material, will increase from 44,000 tons to 500,000 tons per year.
The project will also work with farmersproviding inputs, mechanization, logistics, certification and training to help them produce oilseeds, which are grown on degraded land unsuitable for food production and/or grown in rotation with food crops, helping to improve soil fertility. The deal was announced at the ongoing Africa CEO Forum 2024 in Kigali, Rwanda.
“This project marks the dawn of a new sector for Kenyaan area where Kenya could become a world leader,” he said Makhtar Diop, CEO of IFC. “The production of biofuels will not only help decarbonise our transport system, but will also generate income for farmers and create jobs along the value chain. We are proud to collaborate with a company like Eniwhich is leading efforts to reduce the transportation sector’s carbon footprint.”
“Thanks to the collaboration with IFC and the Italian Climate Fund, Eni further strengthens its agrifeedstock projects in Kenyaexpanding its reach to 200,000 Kenyan smallholder farmers over the next five years, and strengthens the country’s integration into the biofuels value chain,” he said Claudio Descalzi, CEO of Eni. “This cooperation fits Eni’s model that leverages public-private partnerships to support communities, generate long-term value and create virtuous and lasting alliances with African countries.”
“We welcome this first operation of the Italian Climate Fund, established at the Ministry of the Environment and Energy Security and managed by the Cassa Depositi e Prestiti”, he said Gilberto Pichetto, Minister of the Environment and Energy Security. “This first operation, in line with the inspiring principles of the Mattei Plan, captures two major priorities: invest in the strategic biofuels supply chain, which is decisive for the future of transport, and address the growth of Kenya’s agricultural sector with an intervention of undoubted socio-environmental impact, strengthening resilience to climate change”.
There Global demand for biofuels has increased by nearly 6% annually over the past five years, and the transportation industry seeks solutions to decarbonize the sector. In a scenario of net zero emissions by 2050, it is expected that the use of biofuels in transport will double, reaching 9% by 2030. Although the production of sustainable biofuels is currently more expensive than traditional fuels, costs are expected to decrease as more capacity is created and technology advances. This new investment will support these efforts.
IFC will also provide consultancy services which will support the development of the advanced biofuels value chain in Kenya, including through the promotion of good agricultural practices and the professionalisation of farmer aggregators. All Eni biofuel agrifeedstocks will receive the International Sustainability and Carbon Certification (ISCC). ISCC is a globally recognized scheme for biofuels with rigorous environmental, social and economic sustainability standards, monitored throughout the entire supply chain. The success of the project will open future replication opportunities in other areas of Africa.
The loan from the Italian Climate Fund is provided through Cassa Depositi e Prestiti, manager of the Fund. The Italian Government’s Italian Climate Fund is aimed at financing public and private projects in emerging and developing countries that contribute to the achievement of climate and environmental objectives, in line with Italy’s international climate commitments.