Government Support, PPP Financing Structure and Geothermal Energy Project Completion in Sub-Saharan Africa: Gaps and Lessons Learned from Kenya
►Sitati Olando (Corresponding Author)
Abstract
Geothermal energy is a strategic resource in Kenya's energy strategy, but its development is constrained by intertwined technical, socio-political, and financial risks. Despite the increasing reliance on public private partnership (PPP) financing and procurement mechanisms for large-scale projects in Kenya, the execution and completion success of geothermal energy development remains highly variable, raising fundamental institutional, policy, and regulatory concerns. This presents a critical research void in understanding the effectiveness of government support in PPP frameworks within Sub-Saharan Africa, given the existing systemic governance and policy challenges. The study, therefore, aims to examine the extent to which government support measures moderate the relationship between PPP financing structures and project completion, drawing from Kenyan lessons and experience in geothermal energy development.
To address this, the study employed a mixed-methods research design, integrating a cross-sectional survey of 48 licensed geothermal projects with key informant interviews involving policymakers, investors, financiers, and developers in Kenya. Structured questionnaires anchored on a Likert scale provided quantitative insights, while interview data supplied qualitative depth. Data analysis incorporated descriptive statistics, regression modelling, and moderation analysis to evaluate the interaction between PPP financing structures, government support measures, and project completion outcomes.
The findings demonstrated that the Kenyan PPP financing structure, particularly comprising public equity and commercial debt, significantly influenced project completion. Furthermore, hybrid or mezzanine financing showed enhanced effectiveness when supported by complementary government support. Importantly, government support strongly influenced PPP financing structures through institutional mandates, feed-in-tariff policies, standardized power purchase agreement (PPA) frameworks, and regulatory guidelines in completing projects. The findings carry significant implications. From a policy perspective, they underscore the necessity of robust state support mechanisms, adaptive PPP frameworks, feed-in-tariff policies, and targeted regulatory reforms to improve project completion outcomes. Theoretically, the findings reinforce the position of Public Choice, Agency, and Systems theories in illustrating the interplay between state interventions, financing structures, and PPP project completion. Overall, these results advance scholarly and practical understanding of geothermal energy project management, offering guidance for policymakers and practitioners seeking to accelerate energy transitions in developing and emerging economies.
Keywords:Geothermal Energy Project, Public–Private Partnership (PPP) Financing Structure, Government Support, Project Completion, Sub-Saharan Africa, Kenya.