Serrari Group

Kenya and Tanzania are poised to strengthen their energy collaboration as the African Development Bank (AfDB) stresses the importance of expediting three key agreements. Valued at Sh43 billion ($309.26 million), these agreements aim to facilitate the exchange of surplus electricity between the two nations.

Central to these agreements are a wheeling agreement between Tanzania Electric Supply Company (Tanesco) and Kenya Electricity Transmission Company Limited, a power exchange deal between Kenya Power and Tanesco, and a tripartite agreement for grid maintenance.

The completion of the 507.5-kilometer transmission line from the Isinya substation to Arusha via Namanga, expected last month, marks a significant stride towards regional connectivity with an intended transfer capacity of 2,000 megawatts.

AfDB emphasizes the pivotal role these agreements play in enhancing regional power trade, aimed at bolstering electricity supply and reducing reliance on costly thermal power sources.

Despite challenges, including delays related to compensation and resettlement, progress remains steady as both nations work towards overcoming these obstacles.

Kenya’s utilization of hydroelectric imports from Ethiopia and Uganda during low hydro-generation periods underscores the potential benefits for Tanzania, particularly amid recent power rationing in certain regions.

As the project nears completion, the vision of a connected and empowered East Africa draws closer to fruition. Through collaborative efforts, Kenya and Tanzania are set to unlock economic opportunities and foster sustainable development across the region.

Stay tuned for further updates as Kenya and Tanzania advance towards finalizing these crucial electricity agreements, paving the way for a brighter, more integrated future for East Africa.
By: Montel Kamau
Serrari Financial Analyst
31st January, 2024

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