The share of electricity imports has for the first time crossed the 10 percent mark as Kenya deepens its reliance on neighbouring countries to avoid power rationing and blackouts.
Data from the Energy and Petroleum Regulatory Authority (Epra) shows that electricity imports accounted for 10.6 percent or 1.53 billion kilowatt-hours (kWh) of the 14.38 billion units bought by Kenya Power in the year to June, up from 4.87 percent in June 2023 and a paltry one percent in 2021.
Electricity from Ethiopia accounted for 81 percent of the total imports under a 25-year power purchase agreement (PPA) Kenya penned with Addis Ababa in 2022.
Without Ethiopia’s power, Kenya would have been pushed into an electricity crisis that would have prompted blackouts and power rationing running for hours on alternating days.
This had the potential to slow down economic growth, increase the cost of doing business as firms tap costly generators and make the country unattractive as a destination for foreign capital.
Kenya’s electricity reserves are under intense pressure amid rising demand.
The country’s energy woes have been compounded by a freeze on new PPAs, which means that Kenya Power cannot bring more producers onto the grid to supply clean and affordable electricity.
This had forced Kenya to increasingly rely on Ethiopia for its power needs, with imports jumping from 337 million kWh in 2022 to 1.53 billion kWh in the year to June.
“The import market share has grown from 1.03 percent in the financial year 202/21 to 10.6 percent in 2024/25. The increase in imports contribution is attributed to the 200Megawatts (MW) from Ethiopia that was added to the grid in December 2023,” Epra says.
Electricity imports from Ethiopia have been critical in ensuring a stable Kenya Power grid. The imports came in handy, especially when Kenya was faced with a ravaging drought that significantly reduced hydro generation at the start of 2023.
Kenya commenced electricity imports from Ethiopia in 2022 through a 25-year deal in which the supplies are priced at 6.50 US cents per kilowatt-hour (kWh), making it significantly lower than what Kenya Power sources locally from independent power producers.
Under the import deal with Ethiopia, Kenya Power had committed to tap a maximum capacity of 200MW in the first three years, rising to 400MW for the remaining period.
Hydropower from Ethiopia is the second cheapest, with a kilowatt-hour priced at $0.065 (Sh8.44), behind locally produced hydropower whose price averaged Sh3.83 last year.
A unit of geothermal power averaged Sh10.28 in the same period.
Power from diesel plants is the costliest. For instance, a unit was priced at Sh56 under a previous PPA that Kenya Power had signed with Muhoroni Gas Turbine, which is owned by KenGen.
Ethiopia has established itself as the biggest source of electricity in the region, supplying Kenya, Tanzania, Djibouti and Sudan. The three countries are tapping into Ethiopia’s vast hydropower generation, notably from the Grand Ethiopian Renaissance Dam (Gerd), whose capacity is 5,150 Megawatts (MW), making it the biggest hydropower dam in Africa.
Kenya is the biggest buyer of hydropower from Ethiopia and bought electricity worth 3.63 billion Birr (Sh3.25 billion) in the year to June 2024, behind Djibouti with purchases amounting to 1.97 billion Birr. Electricity consumption in Kenya has surged over the past few years, with seven new demand peaks in 2024 alone.
Ethiopia, Uganda and Tanzania are now integral in ensuring that Kenya is not plunged into frequent power blackouts or rationing.
“These contracts (with Ethiopia, Uganda and Tanzania) allow Kenya to obtain competitively priced renewable energy from its neighbours while increasing the interconnected grid’s reliability,” Epra says.
Kenya Power and the energy regulator have repeatedly raised concerns over the freeze on PPAs, pointing to the risks of relying on other countries where a major disruption in the generation or transmission can plunge Kenya into a crisis.
The Cabinet lifted the moratorium on new PPAs in February 2023 but lawmakers reinstated it, saying that they needed to first scrutinise the existing ones. The freeze has been in place since 2018 despite increased calls from Kenya Power and the Ministry of Energy to have it lifted.
The deepening reliance on Ethiopia, Uganda and Tanzania has made electricity imports the second-biggest source of electricity after knocking off Lake Turkana Wind Power (LTWP).
Wind power from LTWP had for years been the second-biggest source of electricity in the national grid with a share of 21.56 percent (2.59 billion units) four years ago.
Electricity generation from the LTWP plant and its share in the national grid has since plunged over the years to 1.43 billion units or a share of 9.9 percent in the year ended June 2025.
KenGen remains the biggest contributor of electricity despite its share dropping to 58.9 percent as at June this year from 60.74 percent two years ago.
However, the annual generation of electricity from KenGen’s geothermal and hydro plants has grown to 8,481.13GWh as of June this year from 8,026.86GWh in June 2023.
Besides importing power from Ethiopia, Kenya also has an electricity exchange deal with Uganda and Tanzania in a netting-off arrangement where the country that imports more from the other pays.
Kenya has largely been a net-importer with hydropower from Uganda and Tanzania, with the two countries being critical in ensuring a steady supply in the western part of Kenya.
Importation of hydropower from Ethiopia has significantly grown since 2022 when Kenya signed a 25-year deal to evacuate up to 200 megawatts (MW) of power from the Horn of Africa country.
Kenya Power is currently in talks with Ethiopia to import between 50MW and 100MW of additional power, which it says will come in handy during the peak demand periods in the evening.
The deal between Kenya Power and Ethiopian Electric Power (EEP) will be reviewed in 2027, which will allow Kenya to push for a reduction in the price per unit and also increase imports of up to 400MW.
