🔥 Trending Kenya Power Secures New Energy Deal with Ethiopia

Kenya Power and Lighting Company (KPLC) has recently finalized a renewed power supply agreement with the Ethiopian Electric Utility (EEU), marking a significant development in cross-border energy trade and regional integration in East Africa ¹³⁸. This new agreement, signed in Addis Ababa on July 3, 2026, and formalized on July 10, 2026, builds upon an existing long-term power purchase arrangement that began in November 2022 ³⁵⁸.

Key Aspects of the Renewed Deal

Pricing and Supply Volume

Under the new framework, Kenya Power will purchase electricity from Ethiopia at approximately $0.15 (or 15.5 cents) per kilowatt-hour (kWh) ¹⁵⁷⁹. This translates to about 24.07 Ethiopian Birr per kWh, or roughly KSh 20 per kWh ²⁵. In addition to the energy charge, a monthly demand charge of ETB 1,010.89 (approximately KSh 800) or $6.3 per kilowatt will also apply ²⁹.

The agreement ensures the continued supply of 200 megawatts (MW) of primarily renewable hydropower from Ethiopia to Kenya ³⁶. This supply is crucial for Kenya, especially as it helps prevent power crises and offers a cheaper alternative to thermal power generation ⁶.

Impact on Kenya's Energy Mix

Ethiopian electricity now constitutes more than 10% of Kenya's total grid supply, making EEU the second-largest supplier to the Kenyan grid, after KenGen ⁴. This reliance on Ethiopian power has been strategic for Kenya, particularly during periods of low hydropower generation from its domestic sources ⁶. The imported power is largely clean hydropower, aligning with Kenya's renewable energy goals ³⁸.

Strategic Importance and Future Expansion

This renewed deal is seen as a move to deepen East Africa's energy integration and sustain the flow of clean energy into the Kenyan grid ⁸. It highlights a commitment to strengthening cross-border electricity trade and regional infrastructure ¹⁵.

Furthermore, there are plans to connect an additional 10,500 new customers in Kenya through this deal, with EEU continuing to supply 3 MW of electricity to target areas in northern Kenya ¹⁰. This expansion aims to enhance energy access and reliability for more communities.

Background

The initial power purchase agreement between Kenya and Ethiopia was signed in 2022, enabling Ethiopia to supply up to 200 MW of electricity to Kenya's national grid ³⁶. This arrangement proved vital for Kenya, particularly when facing power shortages ⁶. The recent formalization of the renewed deal ensures the continuation and potential expansion of this critical energy partnership ¹³.