Abstract In this dissertation, I develop a framework for evaluation of renewable energy projects in developing countries. There is a global common sense that addressing the increasing energy demands of both developed and developing countries with the conventional exhaustible fossil fuels will be difficult in the long-term. In developing countries, in addition to providing energy for the industrial development, providing services to meet basic human needs such as heat and light in the rural and poorer regions are other main reasons for their increased energy demand. This provides the opportunity for renewable energy resources to gain an increasing share in global energy supply. I explain the environmental and socio-economic impacts of renewable energy in general and in developing countries as a basis for assessing renewable energy projects. I evaluate the renewable energy potentials in Kenya, a leading developing country in East Africa. I investigate the available potentials for different renewable energy sources in Kenya, which provides valuable information for policy and decision-makers to alleviate the development-related issues of the country. Furthermore, I identify the main problems and opportunities associated with renewable energy projects in Kenya, which are used to develop a decision-making model. Multi-criteria decision making (assessing social, economic and environmental aspects) is applied here. Based on the potentials, I focus on five main alternative renewable energy resources in Kenya; wind, solar, geothermal, small hydro and biomass. For multi-criteria decision analysis, I identify a range of criteria including cost of generated electricity, job creation, available infrastructure and potential, safety, environmental impacts and land use. Based on my analysis including multi-criteria decision analysis of renewable energy in Kenya, geothermal energy gains the highest rank among the five alternatives which is mainly due to the available extensive resource, government and industrial supports and relatively low feed-in-tariff.