Kenya is considering plans to develop a $2.9 billion gas-fired power plant near Mombasa Port, a move aimed at strengthening electricity supply and supporting the country’s growing industrial and economic needs.

The proposed 1,200-megawatt facility, expected to be located in Dongo Kundu near Mombasa, comes at a time when rising electricity demand is placing increasing pressure on Kenya’s existing power generation capacity.

Government officials say the project forms part of a broader strategy to expand the country’s power generation capacity and ensure a stable energy supply for homes, industries and emerging sectors such as digital infrastructure.

If implemented, the project would become one of the largest energy investments in East Africa, marking a significant step in Kenya’s efforts to modernize its energy infrastructure while diversifying its energy mix.

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Meeting Kenya’s Growing Electricity Demand

Kenya’s power demand has been rising steadily due to rapid economic growth, urbanization and the expansion of energy-intensive sectors such as manufacturing, technology and logistics.

Energy Principal Secretary Alex Wachira said the country urgently needs additional power generation capacity to keep pace with this growth.

“We urgently need about 300 megawatts before 2027 and an additional 300 megawatts by 2028,” Wachira said.

Kenya’s current electricity generation capacity stands at approximately 3,000 to 3,300 megawatts, a level that officials say may soon become insufficient as the country accelerates its industrialization agenda.

President William Ruto has previously emphasized the need to significantly expand the country’s electricity generation capacity to support new investments, particularly in sectors such as data centers and large-scale manufacturing.

According to government projections, Kenya aims to nearly quadruple its generation capacity to 10,000 megawatts within the next decade, ensuring the country has sufficient power to support long-term economic growth.

Large digital infrastructure projects are also expected to increase demand for electricity. For example, a single large-scale data center can require up to 1,000 megawatts of electricity, placing significant pressure on national power systems.

Strategic Location Near Mombasa Port

The proposed power plant is expected to be located in Dongo Kundu, a rapidly developing industrial area near Mombasa Port, Kenya’s largest maritime gateway.

The coastal location offers strategic advantages for the project, particularly in terms of access to imported liquefied natural gas (LNG).

Because Kenya does not currently have domestic natural gas reserves capable of supporting large-scale electricity generation, the plant will rely on imported LNG supplies.

Locating the facility near the port will simplify logistics and enable efficient fuel imports through coastal energy infrastructure.

Industry analysts note that the site could also position Kenya as an emerging regional LNG hub, potentially supplying energy to neighboring markets in East Africa.

If completed, the project could strengthen Kenya’s role in the regional energy value chain, particularly as demand for reliable electricity grows across the East African Community.

Transitioning Away From Heavy Fuel Oil

The gas-fired power plant is also part of Kenya’s strategy to reduce its reliance on heavy fuel oil (HFO) power plants, which are among the most carbon-intensive sources of electricity generation.

The government has announced plans to retire or convert all HFO power plants to liquefied natural gas by 2030 as part of its broader clean energy strategy.

While natural gas is still a fossil fuel, policymakers often view LNG as a transition fuel that can provide more stable and lower-emission power compared with heavy fuel oil.

Gas-fired plants can also provide flexible power generation, helping stabilize electricity grids that increasingly incorporate variable renewable energy sources such as wind and solar.

Kenya’s energy transition strategy therefore combines continued investment in renewable energy with the development of flexible gas-fired power infrastructure capable of supporting grid stability.

KenGen Expected to Play Key Development Role

The project is expected to be developed through a collaboration between private investors and state-owned Kenya Electricity Generating Company (KenGen), the country’s main power producer.

KenGen has traditionally focused on renewable energy generation, particularly geothermal power, which currently provides the largest share of Kenya’s electricity supply.

However, the company has been exploring ways to diversify its energy portfolio while maintaining financial stability and meeting rising demand.

In addition to geothermal projects, KenGen has also expanded into solar power initiatives and other clean energy technologies.

Under the proposed LNG project, KenGen could play a central role in developing and operating the new facility alongside international investors.

Before construction can begin, the government is currently seeking transaction advisers who will help design the financial and technical structure of the project.

These advisers will be responsible for developing the investment model, identifying partners and structuring financing arrangements.

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Part of Kenya’s Broader Energy Expansion Strategy

The Dongo Kundu project forms part of a broader national strategy aimed at strengthening Kenya’s energy infrastructure and supporting long-term economic development.

Kenya has long positioned itself as a leader in renewable energy within Africa, with geothermal, wind and hydropower accounting for a large share of the country’s electricity generation.

At the same time, the government has been exploring new technologies to diversify its energy mix and ensure reliable power supply during periods of high demand.

In recent years, Kenya has pursued several major energy investments, including geothermal and renewable energy projects.

Among them is a $1 billion geothermal project at Suswa, developed in partnership with Indonesian energy firm Pertamina Geothermal Energy.

Another significant project is the $800 million Paka geothermal development, a collaboration between AMEA Power of the United Arab Emirates and Kenya’s Geothermal Development Company.

Kenya has also explored nuclear energy as a potential long-term power source. The country previously announced plans to begin construction of its first nuclear power plant by 2027, although those plans remain under development.

Together, these initiatives reflect Kenya’s strategy of combining renewable energy expansion with complementary energy sources capable of providing stable baseload power.

Previous LNG Projects Faced Delays

While the new gas-fired power plant signals renewed momentum in Kenya’s LNG strategy, previous projects in the sector have experienced delays.

Earlier initiatives included:

• The 2015 Qatar Gas agreement, which aimed to introduce LNG imports to Kenya
• The Mombasa LNG Terminal feasibility project conducted between 2021 and 2024
• The Kenya Pipeline Company LNG and LPG storage initiative announced in 2023

These projects encountered challenges related to financing, infrastructure development and market conditions.

As a result, the Dongo Kundu project is widely seen as a test case for Kenya’s ability to successfully develop large-scale LNG infrastructure.

If completed successfully, the project could help accelerate future LNG-related investments across the country.

Financing and Market Developments

The government’s push to strengthen the energy sector comes at a time when Kenya is also expanding its capital markets to help finance large-scale infrastructure projects.

In March 2026, the Kenya Pipeline Company (KPC) completed a major public offering, with trading officially commencing on the Nairobi Securities Exchange (NSE).

The IPO resulted in the sale of a 65 percent stake in the company and was oversubscribed by 105.7 percent, raising approximately KSh106.3 billion (about $823 million) from investors.

The transaction marks Kenya’s largest initial public offering since 2008, reflecting growing investor confidence in the country’s energy and infrastructure sectors.

Strong participation from both institutional and retail investors highlighted the market’s appetite for strategic national assets linked to the energy industry.

Analysts say such financial developments could play an important role in mobilizing capital for major energy projects, including the proposed $2.9 billion LNG-powered electricity plant near Mombasa.

By leveraging domestic capital markets alongside international financing, Kenya may be able to strengthen funding pathways for large infrastructure investments needed to support its long-term energy expansion plans.

Outlook for the Mombasa Gas-Fired Power Project

If developed successfully, the proposed 1,200-megawatt gas-fired power plant could become a cornerstone of Kenya’s evolving energy system.

Its location near Mombasa Port provides strategic advantages for LNG imports, while its large capacity could help stabilize the national grid as electricity demand continues to rise.

At an estimated $2.9 billion, the project is also one of the most significant energy investments currently being considered in East Africa.

However, several challenges remain. The project will require substantial financing, long-term LNG supply agreements and careful coordination between government agencies and private investors.

Additionally, Kenya will need to balance the development of gas infrastructure with its broader ambition to achieve a 100 percent clean electricity grid by 2030.

For policymakers, LNG is increasingly being viewed as a transitional energy source, capable of supporting economic growth and industrial expansion while renewable energy capacity continues to expand.

For now, the energy sector will be closely watching how the government progresses with project financing, regulatory approvals and partner selection.

If the project moves forward as planned, it could play a critical role in shaping the future of Kenya’s energy infrastructure and its role within the regional energy market.

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Photo Source: Google

By: Rosemary Wambui

13th March 2026