At the climax of the Africa Climate Summit, 2023, a prominent highlight of the historic event was the sight of the Kenyan President, driving into KICC in a modest yet striking yellow electric car. The scene was a stark departure from the traditional parade of extravagant vehicles that has become all too familiar. It was a disruption that signaled the inevitability of electric vehicles (EVs) infiltrating our transport system.
Whatever your views, electric vehicles are coming to our roads, neighborhoods and before you know it, to your driveway. But the question remains, how soon can we fully transition to e-mobility? Will it be integrated into our ecosystem?
EVs are powered by electricity stored in batteries. This energy can be harnessed from renewable sources making EVs a sustainable and eco-friendly solution to our transportation needs. With the escalating fuel costs burdening Kenyans, the need for an alternative mode of transport has never been more desperate. And with our abundant renewable energy resources, investing in efficient electricity storage for EVs is not just practical, it’s imperative.
Despite the huge potential promised, it is an apparent reality that EVs are yet to catch on and be fully accommodated in the Kenyan transport sector. This can be blamed on a few hurdles that the country is yet to jump over. Among them is a need for significant infrastructure investments in dedicated charging stations. EVs require access to reliable and affordable electricity, but charging stations are still scarce in many parts of our country. This therefore creates a chicken-and-egg situation; Who will invest in charging stations before there are enough EVs to make it profitable? And who will buy an EV if they can’t charge it?
Investor opportunities as Kenya Transitions To E-Mobility
At its inception, the current government vide its Bottom-Up Economic Transformation Plan 2022-2027, unequivocally conveyed its aspirations regarding energy transition, particularly within the transport and mobility sector.
Metaphorically, in the midst of surging fuel prices under the watch of the same government, perhaps there is no better time to go electric! EPRA estimates that the EV market in Kenya could be worth $2.5 billion by 2030. As businesses across various sectors embrace electric vehicles, they will require legal experts to navigate joint ventures, research and development agreements, distribution agreements, supply agreements, and product assembly and manufacturing agreements.
Public Public-private partnerships will also play a vital role in establishing the necessary charging infrastructure, and facilitating collaboration between the government, private sectors, and project financiers. Furthermore, corporations entering the e-mobility industry will benefit from legal expertise in private equity and venture capital investments.
REGULATORY FRAMEWORK FOR ELECTRIC VEHICLES
Currently, the Energy and Petroleum Regulatory Authority (EPRA) has already released guidelines, effective from September 1st 2023, for EV charging and battery swapping infrastructure which provide clear requirements for businesses operating in this space. For instance, all public charging stations must be certified and type-approved by the Kenya Bureau of Standards (KEBS). This ensures that charging stations meet high safety standards and provide consumers with a reliable charging experience.
FINANCING OF ELECTRIC CARS BY LENDERS
In a bid to make EVs more accessible and affordable, the Movable Property Security Rights Act, 2017 (MPSR) ensures a seamless and secure process of acquisition, financing, and delivery for both sellers and buyers. If a financier is involved, the Act guarantees their right to receive payment without experiencing a lengthy legal process. The Act may not need any amendments as it lends itself to all movable assets.
ENVIRONMENTAL, SOCIAL, AND GOVERNANCE (ESG) CONSIDERATIONS:
Kenya’s push toward embracing electric mobility aligns seamlessly with the global Environmental, Social, and Governance (ESG) agenda. By signing the COP26 declaration and offering financial incentives and tax benefits to encourage the adoption of electric vehicles in its 2023 Budget Policy Statement, Kenya demonstrates its commitment to sustainable and environmentally responsible transportation practices.
ESG considerations are increasingly vital for investors and businesses worldwide. The transition to e-mobility presents numerous ESG opportunities for Kenya such as reducing air pollution and greenhouse gas emissions. Additionally, the renewable energy and EV manufacturing sectors can generate new jobs.
SUSTAINABLE DEVELOPMENT GOALS (SDGS):
The shift to EVs aligns with several of the Sustainable Development Goals (SDGs). EVs can help to achieve SDG 13 (climate action) by reducing greenhouse gas emissions. This is well in line with the Nairobi Declaration which unveiled Africa’s commitment to all-encompassing climate resilience.
Furthermore, EVs contribute to SDG 8(decent work and economic growth) by creating new jobs in the renewable energy and EV manufacturing sectors, fostering economic growth, and promoting decent work opportunities. However, it is crucial to prioritize inclusive and sustainable development throughout the e-mobility transition. This includes ensuring access to EVs for low-income households and rural communities. Kenya’s Vision 2030 identifies e-mobility as a prioritized sector and aims to increase the number of EVs on Kenyan roads to 500,000 by 2030 for the benefit of everyone.
In conclusion, Kenya’s transition to EVs presents an incredibly powerful and transformative opportunity to build a more sustainable and equitable future. By embracing electric vehicles, we can reduce air pollution, create new jobs, and contribute to our country’s sustainable development.
Nevertheless, the legal profession has a vital role to play in supporting Kenya’s EV revolution. Lawyers can help businesses and individuals navigate the complex legal landscape of EVs and ensure a seamless transition.
Prepared by Michael Muya, Grace Waswa & Stella Muraguri
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