Moderating Effect of Communication Strategy on Financial Risk Management Instruments and Performance of Hydroelectric Energy Projects in Kenya
- July 10, 2021
- Posted by: rsispostadmin
- Categories: IJRSI, Management
International Journal of Research and Scientific Innovation (IJRSI) | Volume VIII, Issue VI, June 2021 | ISSN 2321–2705
Amolo Elvis Juma Amolo, PhD1, Charles Mallans Rambo, PhD2*, Charles Misiko Wafula, PhD3*
1Lecturer PhD, University of Nairobi, Kenya
2Associate Professor PhD, University of Nairobi, School of Open and Distance Learning, Kenya
3Senior Lecturer PhD, University of Nairobi, School of Open and Distance Learning, Kenya
*Corresponding author
Abstract
Hydroelectric energy investment has been underexploited in Kenya due to financial constraint arising from investor’s negative perception of the regions high investment risk and low creditworthiness which retards the degree of private capital penetration. The purpose of the study was to assess the moderating influence of Communication strategy on the relationship between financial risk management instruments and performance of hydroelectric energy projects in Kenya. The study adopted pragmatism paradigm and descriptive survey design while questionnaires and interview guide were used to collect quantitative and qualitative data from a census of 94 participants. Validity coefficient of 0.775 and reliability coefficient of 0.781 were obtained after pretesting of the instruments amongst the 10% of the participants. Analysis involved descriptive statistic of mean and standard deviation and inferential statistic of Correlation and Regression at a significance level of 0.05 and thematic content analysis of qualitative data for triangulation. The hypothesis result: 1. H0: Communication strategy does not significantly moderate the relationship between financial risk management instruments and performance of hydroelectric energy projects in Kenya was rejected since P=0.000<0.05. Therefore the study concluded that there is significant influence of all financial risk management instruments as well as moderating effect of Communication strategy on performance of hydroelectric energy projects in Kenya. It is recommended that Project management and policy makers should integrate appropriate communication strategy amongst financial risk management instruments users and providers to improve performance of hydroelectric energy projects besides developing targeted policies for strengthening implementation of the financial risk management instruments to boost investors and lenders confidence. Further research should be carried out on the influence of risk communication human resource on power projects in Kenya.
Introduction
In Kenya, in spite of having an estimated hydropower potential of about 9,000MW, only 848.8 MW has been exploited (Ministry of Energy, 2020) due to financial constraints. Financial markets can play critical role in stimulating private investments into the renewable energy development to bridge the scarce resources at disposal of the public sector (Rezec and Scholtens, 2017). However, investor’s negative perception of Kenya’s high investment risk lowers the degree of private capital penetration (OECD, 2013). Thus, proper communication strategy regarding the utilization of financial risk management instruments to de-risk renewable energy infrastructure projects is essential for reducing private investment cost.
