Kenya has cleared the path for power producers to directly sell electricity to larger consumers, ignoring a World Bank’s warning against the push to end Kenya Power’s monopoly.
The State has published the Energy (Electricity Market, Bulk Supply and Open Access) Regulations of 2026 that allow producers to rival Kenya Power.
The regulations will allow producers with no existing power purchase agreements (PPAs) with Kenya Power to sell the electricity to the big consumers, like small commercial enterprises, industries, and factories.
The producers will apply to use the network of Kenya Power and the Kenya Electricity Transmission Company (Ketraco) to reach the large consumers while paying the two firms an access fee known as wheeling charges.
The World Bank cautioned that allowing other firms to sell power in competition with the sole distributor will trigger a surge in electricity prices, which have risen the most among basic items over the past five years.
The larger and moneyed customers pay more for a unit of electricity, allowing Kenya Power to use them in subsidising some domestic consumers.
The World Bank reckons that domestic consumers could be forced to pay more should the large consumers migrate to the new entrants.
Kenya Power currently enjoys a near monopoly in the sale of electricity, with the big consumers accounting for 70 percent of its users.
‘A network service provider shall provide non-discriminatory open access to its transmission or distribution system to a licensee or an eligible consumer,’ the regulations say.
‘The network service provider shall grant open access to the wheeler, provided that the load shall not be less than one megavolt-ampere (1MVA) in the distribution system or ten megavolt-amperes (10MVA) in the transmission system.’
Consumers with load demands of 10MVA include factories or communities that house residential and commercial tenants with a high daily usage of power.
The World Bank warns that the shift will expose Kenya Power to competition risks, crippling the Nairobi bourse-listed utility due to long-term wholesale electricity agreements it has inked with generators like KenGen, Lake Turkana Wind and OrPower4.
Agreements for the direct sale of electricity will be for a period of between one and 10 years.
The Energy and Petroleum Regulatory Authority (Epra) must approve the prices that the power producers will sell the electricity.
Industries, factories and businesses bought 7,313 Gigawatt-hours (GWh) of power or 70 percent of the 10,570GWh that Kenya Power sold in the year ended June 2025.
The utility firm’s electricity sales in the local market have steadily grown over the past few years to hit 11,330.84GWh in the year to June 2025 compared to 10,473GWh the previous year and 9,186GWh in the year ended June 2021.