Risk Management Strategies and Project Performance in the Kenyan Energy Sector: a Case of Schneider Electric (Kenya) Ltd

Abstract

Energy security incorporating availability and reliability is considerably core to national and international economics and attainment of development goals. However, the dynamic nature of the energy sector necessitates into account the geopolitics involved, governmental regulations, market controls, technological advancements, financial liability, levelized cost of energy from different sources, high initial investment, and environmental sustainability. Importance of performance of project in the sector is perceived on degree to which these risks are mitigated. The unique nature of risks in the energy sector induce complexity in management strategies. This study aimed to advance the understanding on risk management strategies with respect to energy project performance in Kenya. Complexities faced in the larger energy sector particularly in developing nations such as Kenya necessitate having a structured risk management approach. This research employed an interpretivism paradigm and descriptive research design in addressing the research objectives. In data collection, a semi-structured questionnaire was used to collect primary data from 19 participants sampled purposively. Descriptive analysis approach was used in analysing collected data. From the findings, the four risk management strategies - risk avoidance, risk reduction/mitigation, risk transference, and risk acceptance - risk mitigation/reduction was identified as the most active strategy in Energy Projects. Risk transference through outsourcing, subcontracting, or joint ventures is also effective, while risk acceptance should only be considered as a last resort. Ultimately, project managers and organizations should choose an appropriate risk management strategy based on the type of risk and situation faced.