KenGen-Backed Fertilizer Plant Plans to Tap Carbon Markets as Kenya Pursues Green Industrial Future

KENGEN

Kenya’s plan to build its first large-scale green fertilizer plant is taking on added significance, with developers preparing to earn revenue not only from fertilizer production but also from carbon credits linked to the project’s lower emissions.

The $832 million facility, supported by the state-owned Kenya Electricity Generating Company, or KenGen, will be powered entirely by geothermal energy. Unlike conventional fertilizer production, which heavily relies on fossil fuels, the Naivasha plant will utilize renewable power, significantly reducing its carbon footprint. By replacing imported fertilizer produced through more polluting methods, the facility is expected to cut an estimated 600,000 tons of carbon dioxide emissions each year.

Those avoided emissions could translate into a new income stream. Project developers plan to sell carbon credits in international markets, where companies and governments purchase them to offset their own emissions. Each credit corresponds to one ton of carbon dioxide that is either prevented or removed from entering the atmosphere, turning climate-friendly production into a financial opportunity.

The plant reflects Kenya’s growing effort to use its vast geothermal resources to support industrial expansion while limiting environmental harm. Developed as a partnership between KenGen and China’s Kaishan Group, the project will rely on 165 megawatts of geothermal power supplied by KenGen over the next three decades. This steady supply of renewable energy will allow the plant to produce what is known as green ammonia, a cleaner alternative to conventional fertilizer inputs.

Developers expect the carbon credit program to run for an initial 10-year period, with the option to extend it twice. That could allow the project to generate carbon-related revenue for up to 30 years, helping to strengthen its long-term financial viability and support future investments in low-carbon technologies.

Once operational at full capacity, the plant is projected to produce between 200,000 and 300,000 tons of fertilizer annually. This could ease Kenya’s reliance on imported fertilizer, which is often subject to global price swings and supply disruptions. Local production may also help stabilize prices for farmers while improving access to a critical agricultural input. KenGen estimates the facility could generate about $13 million in net profit each year once it reaches full operation.

The project also supports Kenya’s broader climate goals, including its commitment to cut greenhouse gas emissions by 32 percent by the end of the decade. Officials view the fertilizer plant as an example of how renewable energy can drive industrial growth while contributing to climate solutions.

As global industries face increasing pressure to reduce emissions, Kenya’s geothermal-powered fertilizer plant stands at the intersection of energy, agriculture and climate finance. Beyond strengthening the country’s manufacturing base, it could also establish Kenya as a participant in the expanding global market for carbon credits, where reducing emissions has become not just an environmental priority, but an economic one.