Subsidies and Biogas Plant Installations in Kenya: A Case Study of the ABPP

19 Pages Posted: 31 Mar 2018

See all articles by Stephen Mailu

Stephen Mailu

Kenya Agricultural and Livestock Research Organization

Kevin Kinusu

Humanist Institute for Cooperation with Developing Countries (HIVOS)

Lutta Muhammad

Kenya Agricultural and Livestock Research Organization

Date Written: January 28, 2018

Abstract

Biogas installations on smallholder farms can be seen as one of the limited methods of climate change mitigation from a developing county perspective. Through the Africa Biogas Partnership Programme, over 11,000 plants were installed, thanks to subsidies in the form of financial assistance to offset part of installation costs. After a short review of the literature surrounding subsidies in the domestic biogas sector, the paper investigates whether subsidy incentives are effective in increasing the installation of biogas digesters. Using a panel dataset from 42 counties in Kenya, a spatially explicit tobit model is used to derive estimates of the effect of the subsidies on installations. These results suggest that subsidies do play a major role in encouraging installations and the results further point to a significant positive relationship between the number of technicians, past performance, water availability and herd sizes and installations indicating the importance of these variables as predictors of installations. A 10% increase in subsidies is associated with a 5% increase in installed volume.

Keywords: biogas, spatial, panel data, tobit

JEL Classification: Q50, Q40, Q16

Suggested Citation

Mailu, Stephen and Kinusu, Kevin and Muhammad, Lutta, Subsidies and Biogas Plant Installations in Kenya: A Case Study of the ABPP (January 28, 2018). Available at SSRN: https://ssrn.com/abstract=3149957 or http://dx.doi.org/10.2139/ssrn.3149957

Stephen Mailu (Contact Author)

Kenya Agricultural and Livestock Research Organization ( email )

Nairobi

Kevin Kinusu

Humanist Institute for Cooperation with Developing Countries (HIVOS) ( email )

Raamweg 16
The Hague, 2596
Netherlands

Lutta Muhammad

Kenya Agricultural and Livestock Research Organization ( email )

Kaptagat Rd
Nairobi, 00200
Kenya

Register to save articles to
your library

Register

Paper statistics

Downloads
46
Abstract Views
248
PlumX Metrics