One way out of our debt: clean energy and social enterprise

COVID-19 has left many governments with significant challenges. At the end of March 2021, the UK government’s debt was around 104% of GDP. High public debt simply means governments borrowing from our future and that of our children.

Immediately following the pandemic came rising fuel prices caused partly by a shortage of wind power in Europe. This was rapidly followed by Russia’s invasion of Ukraine and the stark reality that the world is heavily dependent on Russia for its oil and gas supply. If we were ever unclear about the absolute need to invest globally in clean, reliable energy sources, the fog has now lifted.

To manage this level of public debt, we must make sure our future is one of growth. An important driver of economic growth is reliable and affordable electricity. Access to a steady supply of energy stimulates innovation, which in turn is the basis for long-term economic growth. 

In South Africa, people have long been living with ‘load shedding’ – interruption of electricity supply to avoid excessive load on the generating plant. Social media is alive with recipes for food that can be prepared without electricity. A freezer in the United States consumes ten times more electricity than a Liberian citizen does in one year.

While the world is slowly healing from the impacts of the pandemic, the example of Kipeto provides an uplifting ray of hope. Located in a spectacular part of the Rift Valley southwest of Nairobi, amidst a quiet community of Maasai pastoralists and farmers, rises the Kipeto Wind Energy Project, a project covering 70 square kilometres, consisting of 60 wind turbines and 100 megawatts installed capacity for the supply of clean renewable energy around 250,000 households.

Socially conscious projects like Actis portfolio company Kipeto – which is part of BTE Renewables – have sustainability and community at the heart of their business plans, creating longer term prosperity for the communities within which they operate.

For instance, Kipeto has built 83 new homes for the local Maasai landowners, creating over 400 jobs during the construction period and training 200 people during the construction phase. As part of its commitment to conservation and the environment, Kipeto has one of the world’s most unique biodiversity action plans, with a full-time ornithologist and deputy ornithologist who lead a dedicated team of nearly 30 bird observers on site. This team works in collaboration with the Kenya Wildlife Service and several avifauna organisations to ensure vulture conservation both at the Kipeto site and across the southern Rift Valley.

By the nature of our roles, governance professionals are a sector of a company’s workforce that is in constant touch with the most senior people in organisations. A company’s directors can have much to learn from its workforce, which can contribute to setting strategy and long-term success. This is why the 2018 Corporate Governance Code specifically refers to the role of the workforce and promotes its involvement in company governance. It stands to reason that governance professionals can influence the pivot towards clean energy and socially conscious investing by voicing opinions and sharing examples of meaningful projects.

By Fahrin Ribeiro, Company Secretary, Actis

Fahrin will be speaking at Governance 2022 as part of the The four Ps ­– purpose, profit people planet break out session.