A number of renewables projects, including wind power facilities, in Kenya had stalled after lenders raised concerns over the guarantees.
The move mow means the projects, which include the 300MW Turkana wind farm, are now likely to proceed.
Kenya’s Treasury had fought the Ministry of Energy over the new guarantees, after its success in reducing public debt.
Debt in Kenya fell from 65 per cent of GDP in 2002 to the current 43 per cent.
The Treasury had been reluctant to issue sovereign guarantees to massive energy projects, arguing that the debt exposure would jeopardise the country’s international credit rating.