The International Finance Corporation (IFC) and the Italian Climate Fund have announced a $210 million investment in Eni S.p.A.'s Kenyan subsidiary. This investment aims to enhance the production and processing of advanced biofuels, thereby bolstering the decarbonization efforts within the global transport sector and positively impacting the livelihoods of approximately 200,000 small-scale Kenyan oilseed farmers.

The investment comprises $135 million from IFC and $75 million sourced from the Italian Climate Fund, aligning with the Italian Government’s Mattei Plan implementation in Kenya. This funding will support Eni in augmenting both the production of advanced biofuel feedstock cultivated in Kenya and processing capabilities through the establishment of new processing facilities. Anticipated enhancements include the escalation of oilseed production, the primary feedstock, from 44,000 tons to 500,000 tons annually.

The initiative will collaborate with farmers, offering assistance in inputs, mechanization, logistics, certification, and training to enable them to cultivate oilseeds. These oilseeds are cultivated on degraded land unsuitable for food production and/or cultivated in rotation with food crops, thereby aiding in the improvement of soil fertility.

The announcement of the agreement took place during the 2024 Africa CEO Forum held in Kigali, Rwanda.

“This project signifies the emergence of a new industry in Kenya, one where the country has the potential to become a global leader,” stated Makhtar Diop, Managing Director of IFC. “Producing biofuels will not only help decarbonize our transportation system but also generate income for farmers and create jobs across the entire value chain. We are proud to collaborate with a company like Eni, which is at the forefront of efforts to reduce the carbon footprint of the transport industry.”

“We extend our welcome to the inaugural operation of the Italian Climate Fund, set up under the Ministry of the Environment and Energy Security and overseen by Cassa Depositi e Prestiti,” stated Gilberto Pichetto, Italy’s Minister of the Environment and Energy Security. “This initial venture, aligned with the guiding principles of the Mattei Plan, addresses two key priorities: investing in the strategic biofuels supply chain, crucial for the future of transportation, and fostering the growth of Kenya’s agricultural sector with a socio-environmental intervention that strengthens resilience to climate change.”

Global demand for biofuels has grown by almost 6 percent annually over the past five years, driven by the transport industry's pursuit of decarbonization solutions. In a scenario aiming for net zero emissions by 2050, biofuel use in transportation is projected to more than double, reaching 9 percent by 2030. Although sustainable biofuel production is currently more costly than traditional fuels, expenses are anticipated to decrease as capacity expands and technology progresses. This new investment will bolster these efforts.

IFC will also offer advisory services to support the development of Kenya’s advanced biofuel value chain, promoting good agricultural practices and the professionalization of farmer aggregators. All of ENI’s biofuel feedstock will receive International Sustainability and Carbon Certification (ISCC), a globally recognized certification scheme for biofuels that ensures rigorous environmental, social, and economic sustainability standards, audited throughout the entire supply chain. The triumph of this project has the potential to lay the groundwork for comparable endeavors throughout Africa.

The loan from the Italian Climate Fund is extended through its managing entity, Cassa Depositi e Prestiti. The Italian Government’s climate fund, known as the Fondo Italiano per il Clima, is designed to finance public and private projects in emerging and developing countries. These projects contribute to achieving climate and environmental goals, aligning with Italy’s international climate commitments.