International Finance Corporation (IFC) and the Italian Climate Fund have invested $210 million in Eni S.p.A.’s Kenya subsidiary to support the expansion of advanced biofuel production and processing, contributing to the decarbonization of the global transport industry and the livelihoods of up to 200,000 small-scale Kenyan oilseed farmers.
The investment includes $135 million from IFC and $75 million mobilized from the Italian Climate Fund, as part of the implementation of the Italian Government’s Mattei Plan in Kenya.
This partnership will enable Eni to increase both the production of advanced biofuel feedstock grown in Kenya and processing capacity through the construction of new processing plants. The production of oilseeds, the primary feedstock, is expected to increase from 44,000 tons to 500,000 tons per year, Eni stated in a press release on Friday.
Besides expanding production, the project will also work closely with farmers by providing inputs, mechanization, logistics, certification, and training to aid farmers produce oilseeds on degraded land that is not suitable for food production or in rotation with food crops, ultimately enhancing soil fertility.
The announcement of this partnership was made at the 2024 Africa CEO Forum in Kigali, Rwanda.
“This project marks the dawn of a new industry for Kenya, an industry 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.”
“By partnering with IFC and the Italian Climate Fund, Eni further enhances its agrifeed 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 fits with Eni’s model to leverage public-private partnerships to support communities, generate long-term value, and create virtuous, 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 Cassa Depositi e Prestiti,” said Gilberto Pichetto, Italy’s Minister of the Environment and Energy Security. “This first operation, in line with the inspiring principles of the Mattei Plan, captures two major priorities: investing in the strategic biofuels supply chain, which is decisive for the future of transportation, and addressing the growth of the Kenya’s agricultural sector with an intervention of undoubted socio-environmental impact, strengthening resilience to climate change.”
The demand for biofuels has been steadily increasing, with a nearly 6% annual growth over the last five years. In a net zero by 2050 scenario, the use of biofuels in transportation is expected to more than double to 9% by 2030. While the production of sustainable biofuels is currently more expensive than traditional fuels, costs are expected to decrease 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. This includes promoting good agricultural practices and professionalizing farmer aggregators. All of Eni’s 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 success of this project can open up opportunities for replication elsewhere in Africa.
The Italian Climate Fund’s loan is provided through Cassa Depositi e Prestiti, the manager of the Fund. The Italian Government’s climate fund (Fondo Italiano per il Clima) aims to finance public and private projects in emerging and developing countries that contribute to the achievement of climate and environmental targets, in line with Italian international climate commitments.
