The billing for Kenya’s electricity imports from Ethiopia nearly tripled to Sh8.68 billion (Birr 10.45 billion) in the year ended July 2025, signalling the country’s deepening reliance on power supply from Addis Ababa.
Disclosures from Ethiopia Electric Power (EEP) show this was a 187.8 percent increase from Sh3.01 billion (Birr 3.63 billion) the previous year.
Kenya has, in recent years, increased its reliance on Ethiopia to avert blackouts, importing 1,274.42 gigawatt-hours (GWh) in the year ended June 2025.
Kenya recorded six peak electricity demand instances last year, highlighting fast-growing demand driven by economic activity and increased household connections, with customers surpassing 10 million.
Power shift
A freeze on new power purchase agreements worsened Kenya’s generation challenges, forcing the country to rely more on Ethiopia to shore up supply and avert outages.
Without imports from Ethiopia, Kenya Power would likely have been forced to ration electricity more widely, especially during evening peak demand. Peak demand currently stands at 2,439MW, recorded on December 4, 2025.
Increased imports have made Ethiopia the third-largest source of electricity to Kenya Power, with a 9.88 percent share last year, behind Lake Turkana Wind Power (9.97 percent) and KenGen (57.49 percent).
‘Kenya’s spinning reserves (extra unused electricity) are currently below five percent, putting the country on the verge of potentially significant blackouts,’ Principal Secretary for Energy Alex Wachira recently told this publication.
Spinning reserves refer to backup power that is available and ready for rapid deployment during outages. The globally recommended range is between seven percent and 15 percent.
Kenya Power was barred from signing new power purchase agreements in 2018. The moratorium was intended to allow scrutiny of existing contracts blamed for high electricity costs.
However, the freeze – lifted in late 2025 – saw local generation lag behind rising demand, forcing rationing in some areas during evening peaks.
Kenya turned to Ethiopia to prevent a full-blown crisis. The two countries signed a deal in 2023, allowing Ethiopia to supply up to 200MW of relatively cheap power to the national grid.
Kenya pays $0.065 (Sh8.39) per kilowatt-hour, making Ethiopian power the second cheapest after locally produced hydro at Sh3.27 per unit.
Cheaper hydro imports have helped Kenya meet rising demand without significantly increasing consumer tariffs over the past three years.
Supply risk
However, growing dependence on Ethiopian electricity exposes Kenya to risks in the event of supply disruptions.
Kenya Power managing director Joseph Siror recently said the country could face a crisis if major hydropower plants in Ethiopia fail, highlighting the downside of this reliance.
‘My concern is that this is hydropower from these countries, and in a situation where there is serious drought, then they might be left in a position where they might be unable to meet this obligation (supplying electricity),’ Dr Siror said late last year.
Imported electricity has also reduced reliance on costly thermal power plants, particularly during peak demand. Thermal power costs an average of Sh35.09 per unit, making it the most expensive source in the national grid.
The imports have eased pressure on local generation, which has struggled to keep pace with rising demand.
Ethiopia’s contribution is expected to grow further, with imports set to double from the end of this year.
The agreement between EEP and Kenya Power allows imports to rise to 400MW from December, with a review of the unit price scheduled for next year.
Besides Ethiopia, Kenya also has power exchange agreements with Uganda and Tanzania, where the net importer pays the exporting country.
Kenya has largely remained a net importer and pays Uganda an average of $0.09 (Sh11.6) per kilowatt-hour.