Kenya Power has renewed its agreement to import electricity from Ethiopia at approximately KSh20 per kilowatt-hour (kWh), extending a cross-border partnership aimed at strengthening electricity supply and supporting the country's growing energy needs.
The agreement continues power imports through the Ethiopia–Kenya electricity interconnector, which links the two countries' national grids.
The new tariff is significantly higher than the 6.5 US cents per kWh agreed under the original 2022 contract, reflecting a revised pricing framework between the two utilities.
However, Kenya Power maintains that the imported electricity remains competitive when compared to the overall cost of supplying power to consumers after generation, transmission and other charges are factored in.
Why import electricity?
Although Kenya generates most of its electricity from renewable sources such as geothermal, hydro and wind, electricity demand continues to grow as more households and businesses are connected to the national grid.
Importing hydropower from Ethiopia helps Kenya meet peak demand, reduce pressure on local generation plants and improve the reliability of electricity supply.
The two countries are connected through the 1,045-kilometre Ethiopia–Kenya High Voltage Direct Current (HVDC) transmission line, which can transmit up to 2,000 megawatts of electricity.
Will consumers benefit?
Whether the renewed deal translates into lower electricity bills remains uncertain.
Energy experts note that the price consumers pay includes much more than the cost of purchasing electricity.
Transmission, distribution, fuel cost adjustments, foreign exchange fluctuations and taxes all contribute to the final bill.
Even so, importing relatively affordable hydropower could help Kenya reduce reliance on more expensive thermal power during periods of high demand, potentially easing pressure on electricity costs over time.
Strengthening regional power trade
The renewed agreement also reinforces the growing role of regional electricity trading in East Africa. By sharing power across borders, countries can improve energy security, make better use of available generation capacity and support economic growth across the region.
As electricity demand continues to rise, partnerships such as the Kenya–Ethiopia power deal are expected to play an increasingly important role in ensuring reliable and sustainable energy supplies.
