Kenya and Ethiopia have renewed their cross-border electricity supply agreement, reinforcing regional energy cooperation under the Eastern Africa Power Pool (EAPP). The revised deal secures continued imports of Ethiopian hydropower, which now supplies more than 10% of Kenya’s electricity demand, while supporting cleaner energy, improved border electrification and long-term energy security.
Key Overview
- Kenya will pay about KSh 20 per kWh for imported Ethiopian electricity.
- Ethiopian power now supplies over 10% of Kenya’s national grid.
- Kenya plans to extend imported electricity to Marsabit and Mandera.
- Ethiopia continues expanding regional electricity exports.
- The agreement supports East Africa’s regional power integration.
Kenya Renews Cross-Border Electricity Agreement
Kenya has renewed its electricity import agreement with Ethiopia, strengthening regional power trade as both countries seek to improve energy security and expand access to affordable renewable electricity.
The agreement, signed in Addis Ababa between Kenya Power and Lighting Company (KPLC) and the Ethiopian Electric Utility (EEU), sets the import price at about KSh 20 (US$0.155) per kilowatt-hour, together with a monthly demand charge of about KSh 800.
The agreement was signed by Kenya Power Managing Director Joseph Siror and EEU Chief Executive Getu Geremew.
Ethiopian Power Becomes Key Source for Kenya
Electricity imported from Ethiopia now accounts for more than 10% of Kenya’s total grid supply, making EEU the country’s second-largest electricity supplier after KenGen.
The revised agreement follows the original 25-year Power Purchase Agreement (PPA) signed in 2022. Although the contract allowed tariff renegotiations from 2027, both utilities agreed to finalize the revised pricing a year earlier without publicly explaining the change.
The agreement also renews a separate electricity supply arrangement that has served Moyale and surrounding communities since 2011.
Under that programme, Ethiopia continues supplying 3 MW of electricity to approximately 10,500 customers living near the Kenya-Ethiopia border.
Kenya Plans to Expand Border Electrification
Kenya Power is also discussing further electricity imports to extend supply into Marsabit and Mandera counties.
Both regions currently rely heavily on expensive diesel-powered generators. Replacing thermal generation with imported hydropower is expected to lower electricity costs while reducing greenhouse gas emissions.
The initiative forms part of broader efforts to improve electricity access across northern Kenya while reducing dependence on fossil-fuel generation.
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Growing Demand Drives Electricity Imports
Kenya’s increased reliance on imported electricity has been driven partly by rising electricity demand and a government moratorium on signing new power purchase agreements with independent power producers (IPPs).
The moratorium, first introduced in 2018 and extended in 2023, has slowed additions to domestic generation capacity even as electricity consumption continues to grow.
According to the International Energy Agency (IEA), Kenya’s electricity access rate increased from 37% in 2013 to 79% in 2025.
Nearly 90% of Kenya’s electricity generation already comes from renewable sources, including geothermal, hydropower, wind and solar energy.
Despite this progress, roughly one-quarter of the population—mainly in rural areas—still lacks access to electricity.
To strengthen the country’s electricity infrastructure, the Kenya Electricity Transmission Company (KETRACO) recently launched a review of private investment proposals worth between $385 million and $500 million to develop new transmission lines and substations.
These investments support Kenya’s objective of achieving universal electricity access and clean cooking by 2030.
Ethiopia Expands Regional Power Exports
The agreement also supports Ethiopia’s long-term strategy of becoming one of Africa’s leading electricity exporters.
Over the past seven years, Ethiopia has expanded installed electricity generation capacity from 4,462 megawatts to 9,752 megawatts , largely through major hydropower developments, including the Grand Ethiopian Renaissance Dam (GERD).
The country already exports electricity to Djibouti, Kenya, Tanzania and Sudan, while discussions continue with South Sudan, and Somalia has expressed interest in future imports.
Officials from both countries said the agreement strengthens regional integration under the Eastern Africa Power Pool (EAPP) by promoting cross-border electricity trade, improving supply reliability and supporting economic development across East Africa.
Outlook
The renewed electricity agreement highlights the growing importance of regional power trade in meeting Africa’s rising energy demand. As Ethiopia expands renewable electricity production and Kenya strengthens its transmission infrastructure, cross-border electricity exchanges are expected to play an increasingly important role in improving energy security, reducing reliance on fossil fuels and supporting affordable access to clean electricity across East Africa.
FAQs
1. How much will Kenya pay for electricity from Ethiopia?
Kenya will pay approximately KSh 20 (US$0.155) per kilowatt-hour, plus a monthly demand charge.
2. How much of Kenya’s electricity comes from Ethiopia?
Imported Ethiopian electricity now supplies more than 10% of Kenya’s national electricity grid.
3. Why is Kenya importing more electricity?
Growing electricity demand, combined with limited new domestic generation, has increased the need for imported renewable power.
4. What is the Eastern Africa Power Pool (EAPP)?
The EAPP is a regional initiative that promotes cross-border electricity trade to improve energy security, reduce costs and strengthen power systems across East Africa.
Sources; Ecofin Agency, The Kenyan Wall Street, Powers of Africa
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