📄 Abstract
Geothermal energy plays a central role in Kenya's plan to achieve 100% renewable electricity by 2030, yet geothermal projects continue to face challenges such as cost overruns, delays, and low output reliability. Risk transfer, which involves shifting the burden of project risks to external parties such as insurers, contractors, and financial institutions, is one of the strategies used to manage these challenges, but its effect on project performance in Kenya has not been sufficiently studied. This study examined the effect of risk transfer strategies on the performance of geothermal energy projects in Kenya. The study was anchored on Transaction Cost Theory and adopted a quantitative correlational research design. The unit of analysis was geothermal energy projects in Kenya, while the unit of observation was 360 individuals involved in these projects, including project managers, engineers, risk managers, and contractors, drawn from eight geothermal power plants. A sample of 189 respondents was determined using the Yamane formula. Primary data were collected using a structured questionnaire, achieving an 82% response rate after 155 questionnaires were properly filled and returned. Data were analyzed using descriptive statistics (means and standard deviations) and inferential statistics (Pearson correlation and simple linear regression). The findings revealed that risk transfer strategies were poorly implemented among Kenyan geothermal projects, with insurance adoption being the most commonly used mechanism, while communication of risk-sharing measures was the most deficient. The correlation analysis showed a strong, positive and statistically significant relationship between risk transfer strategies and performance of geothermal energy projects (r = 0.838, p < 0.01). The regression results confirmed that risk transfer strategies had a positive and significant effect on performance. The study concluded that risk transfer strategies have a positive and significant effect on the performance of geothermal energy projects in Kenya, even though their current level of implementation remains low. Recommendations include developing a national geothermal insurance framework, enforcing mandatory risk-sharing clauses in contracts, and establishing structured contract review mechanisms.
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📚 How to Cite:
Judy Chepkemoi, Dr. Agnes Kirinyet , RISK TRANSFER STRATEGIES ON PERFORMANCE OF GEOTHERMAL ENERGY PROJECTS IN KENYA , Volume 13 , Issue 7, July 2026, EPRA International Journal of Economics, Business and Management Studies (EBMS) , Pages: 93 - 99 , DOI: https://doi.org/10.36713/epra28622