Kenya Electricity Generating Company (KenGen) has announced plans to apply for electricity transmission and distribution licences for its proposed Green Energy Park project in Naivasha, marking a potentially major shift in Kenya’s electricity market structure.
The move follows new open-access electricity regulations introduced by the Energy and Petroleum Regulatory Authority (EPRA), which allow large consumers to buy power directly from generators instead of relying solely on traditional distributors.
If approved, KenGen would become the first major power producer in Kenya to directly supply electricity to consumers, introducing competition into a market long dominated by Kenya Power and Lighting Company (KPLC).
Key Overview
- Kenya Electricity Generating Company plans to apply for transmission and distribution licences
- The application will be submitted to EPRA on June 2, 2026
- The licences relate to the KenGen Green Energy Park project in Naivasha
- The park will operate using 100% geothermal renewable energy
- The project covers 342 hectares in Olkaria
- Kenya’s new open-access rules allow direct electricity supply to large users
- KenGen supplied 59% of Kenya’s electricity purchased by KPLC in 2025
- KPLC owed KenGen KES 16.6 billion as of mid-2025
KenGen Moves Toward Direct Electricity Supply
Kenya Electricity Generating Company has revealed plans to apply for Electric Power Transmission and Distribution Licences for its proposed Green Energy Park project in Olkaria, Naivasha.
In a public notice issued Tuesday, KenGen’s Company Secretary and General Manager for Legal Affairs, Austin Ouko, confirmed that the company will formally submit its application to the Energy and Petroleum Regulatory Authority (EPRA) on June 2, 2026.
If approved, the licences would allow KenGen to undertake electricity transmission and distribution activities within the Green Energy Park project.
The move could mark a major structural shift in Kenya’s electricity sector by allowing the country’s largest electricity producer to directly distribute power to consumers.
Analysts say the application reflects the beginning of a more competitive electricity market following introduction of new open-access energy regulations in Kenya.
Green Energy Park Targets Renewable Industrial Growth
The KenGen Green Energy Park is a 342-hectare industrial hub located in Olkaria, Naivasha.
The project is designed to provide industries with direct access to 100% renewable geothermal energy and low-cost electricity.
Officials said the park has been categorized as a Special Economic Zone (SEZ) and is intended to attract manufacturers, data centers, and environmentally focused businesses seeking reliable renewable power.
The facility will also provide access to geothermal steam and renewable electricity as part of Kenya’s broader push toward low-carbon industrialization.
Analysts say geothermal energy remains one of Kenya’s strongest competitive advantages within Africa’s renewable energy sector.
Kenya is already regarded as one of the world’s leading geothermal energy producers, with Olkaria serving as the center of much of the country’s geothermal generation capacity.
The Green Energy Park is expected to strengthen Kenya’s ambition of positioning itself as a regional hub for green manufacturing and renewable-powered industrial development.
New Open-Access Rules Reshape Market
KenGen’s move follows EPRA’s gazettement of new open-access electricity market regulations on May 8, 2026.
The Energy (Electricity Market, Bulk Supply, and Open Access) Regulations 2026 allow large industrial and commercial electricity consumers to purchase power directly from generation companies using the national grid.
Under the regulations, eligible consumers include:
- Users drawing at least 1 MVA from the distribution network
- Users drawing at least 10 MVA from the transmission network
Analysts say the reforms could significantly reshape Kenya’s electricity market by reducing the traditional monopoly role historically held by Kenya Power and Lighting Company.
The regulations are expected to increase competition while potentially lowering electricity costs for large industrial consumers.
KenGen Seeks to Reduce Business Risk
KenGen’s decision to pursue direct distribution rights also reflects broader financial and operational concerns within Kenya’s electricity sector.
According to industry figures, KenGen supplied approximately 59%, or 8,482 GWh, of the 14,472 GWh purchased by KPLC during the financial year ending June 2025.
However, KPLC reportedly owed KenGen approximately KES 16.6 billion as of mid-2025.
Analysts say supplying electricity directly to consumers could help KenGen reduce business risks associated with relying heavily on a single power off-taker.
If successful, KenGen would become the first electricity producer in Kenya to directly enter the local transmission and distribution market.
Industry observers believe this could introduce broader competition into Kenya’s energy sector over time.
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Public Participation Process Begins
KenGen stated that the proposed licences would not negatively affect members of the public, local authorities, or surrounding communities.
The company has invited members of the public and other stakeholders wishing to oppose the application or submit representations to do so within 30 days from the date of application.
Printed copies of the application and related documents will also be available for public inspection at the company’s offices in Nairobi.
Analysts say public participation and regulatory transparency are becoming increasingly important as Kenya reforms its energy market and expands private-sector participation.
Renewable Energy Adoption Accelerates
The announcement comes as more companies in Kenya continue transitioning toward renewable and lower-cost energy sources such as geothermal and solar power.
In late April, Sameer Africa applied for an Electric Power Generation and Retail License for a solar self-consumption project at its Nairobi complex.
The project involves installation of a 4 MVA solar system intended solely for on-site electricity use.
Kenya’s broader clean energy transition is also being accelerated by rising adoption of electric mobility.
Recently, Kenya Power and Lighting Company reported cumulative EV charging revenues of Ksh382 million, with electricity sales to the e-mobility sector increasing 113-fold between July 2023 and April 2026.
According to Kenya Power, monthly EV charging revenue rose from Ksh873,907 in July 2023 to Ksh35 million by February 2026.
Industry figures from the Electric Mobility Association of Kenya (EMAK) show that Kenya had more than 35,000 registered EVs by the end of 2025, compared with just 796 vehicles three years earlier.
Kenya’s Energy Market Faces Structural Change
Analysts say Kenya’s new open-access electricity framework could gradually transform the country’s power sector by allowing greater participation from generators and private-sector players.
The reforms may also encourage additional renewable energy investment as industrial consumers seek more reliable and lower-cost electricity supply options.
KenGen’s Green Energy Park project reflects growing convergence between renewable energy generation, industrial policy, and climate-focused economic development.
At the same time, the transition toward a more competitive electricity market may reshape long-standing relationships between generators, distributors, and large commercial users.
Outlook
Kenya Electricity Generating Company’s planned entry into electricity transmission and distribution marks a potentially historic development for Kenya’s energy sector.
The Green Energy Park project could strengthen renewable-powered industrial growth while introducing new competition into Kenya’s electricity market under recently introduced open-access rules.
For KenGen, direct electricity supply may reduce financial risks tied to reliance on a single off-taker while supporting broader geothermal energy expansion.
At the same time, the project highlights Kenya’s wider ambition of positioning itself as a regional leader in renewable energy, green manufacturing, and low-carbon industrial development.
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Sources: Dawan Africa, Techweez, Nairobi Leo, CIO Africa
