Credit Enhancement Mechanisms, Communication Strategy and Performance of Hydro-electric Power Projects in Kenya

Hydroelectric power (HEP) projects in Kenya are capital-intensive and exposed to multiple financial and operational risks, which can undermine performance and investor confidence. This study examined the influence of Credit Enhancement Mechanisms (CEMs) on the performance of HEP projects and assessed the moderating role of Communication Strategy (CS) on the relationship. Guided by a pragmatist philosophy, the study employed a cross-sectional mixed-methods design, targeting 12 HEP projects and key government agencies involved in financing, regulation, and risk management. Quantitative data were collected from 94 respondents using structured questionnaires, while qualitative data were obtained through key informant interviews. Descriptive statistics, correlation analysis, hierarchical regression, and thematic analysis were employed to analyze the data, with robustness tests conducted to ensure stability and validity. The results show that CEMs, particularly currency risk mitigation, political risk insurance, and construction risk mitigation, significantly enhance project performance. CS was found to positively moderate this relationship, amplifying the effectiveness of CEMs. Project age and capacity also contributed to performance outcomes, highlighting the importance of operational maturity and scale. Robustness tests confirmed the stability of these results across ownership structures and analytical specifications. The study concludes that effective financial risk mitigation, reinforced by structured and transparent communication, is critical for optimizing performance of HEP projects. Policy and managerial implications include the institutionalization of targeted CEMs, promotion of local currency financing, and integration of structured communication protocols and emerging instruments such as the green financing to strengthen investor confidence and project sustainability.