Effect of Risk Management Strategies on Performance of Geothermal Energy Projects in Kenya
DOI:
https://doi.org/10.47604/ijscm.3878Keywords:
Risk Management Strategies, Geothermal Energy, Project Performance, Public–Private Partnerships, KenyaAbstract
Purpose: Geothermal energy plays a critical role in enhancing energy security and supporting sustainable economic development in Kenya. However, geothermal projects continue to experience cost overruns, implementation delays, operational inefficiencies and financial challenges arising from inadequate risk management. This study examined the effect of risk management strategies on the performance of geothermal energy projects implemented through Public–Private Partnerships (PPPs) in Kenya. Specifically, the study assessed the influence of risk identification, risk assessment, risk allocation and risk mitigation on project performance.
Methodology: The study adopted a positivist philosophy and a quantitative cross-sectional research design. The target population comprised 517 stakeholders drawn from geothermal PPP projects in Kenya, including project managers, technical staff, support staff and government officials. A sample of 222 respondents was selected using stratified and simple random sampling techniques. Primary data were collected using structured questionnaires. Instrument validity was established using the Content Validity Index (CVI = 0.89), while reliability was confirmed through Cronbach's alpha coefficients ranging from 0.83 to 0.89. Data were analyzed using descriptive statistics, Pearson correlation and linear regression.
Findings: The findings revealed that risk management strategies have a positive and statistically significant effect on the performance of geothermal energy projects (β = 0.598, p < 0.05). The regression model explained 35.5% of the variation in project performance (R² = 0.355), indicating that effective risk identification, risk assessment, risk allocation and risk mitigation improve operational efficiency, schedule performance, budget performance and infrastructure sustainability. The findings further demonstrate that structured risk management is particularly important in geothermal projects because of their high capital intensity, geological uncertainty and long implementation periods. The study also extends New Public Management, New Public Governance and Agency theories by demonstrating how managerial efficiency, collaborative governance and contractual accountability collectively enhance project performance.
Unique Contribution to Theory, Practice and Policy: The study recommends institutionalizing comprehensive risk management frameworks across all phases of geothermal project development. Strengthening risk identification, assessment, allocation and mitigation will improve project delivery, enhance investor confidence and support Kenya's renewable energy objectives under Vision 2030 and Sustainable Development Goal 7.
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Copyright (c) 2026 Anguzu Ronald, Dr. Christine Bando, Dr. Moses Oginda
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