Kenya has overtaken Uganda in energy sector regulation for the first time, following an array of reforms at the Energy and Petroleum Regulatory Authority (Epra) that have enhanced consumer protection and created a more attractive investment environment in the country’s power sector.
The African Development Bank’s (AfDB) Electricity Regulatory Index (ERI) for Africa 2024 ranks Kenya second on the continent—behind Senegal—in terms of energy regulation, pushing Uganda, which had led since 2018, into third place.
Kenya’s rise is largely credited to key changes at Epra that have increased its operational independence, improved transparency, and strengthened its role in safeguarding consumers and facilitating energy investments, the AfDB said.
“Kenya’s ERI score surge reflects its status as a leading reformer. Epra enjoys high independence and accountability—commissioners have secure tenure, and the regulator routinely publishes its decisions and sector reports,” the report, launched at the Africa Energy Forum (AEF) in Cape Town last Friday, states.
“Kenya’s experience underscores the benefit of continuous regulatory innovation and strong institutions. Policymakers should ensure Epra’s independence remains respected.”
The ERI evaluates regulatory effectiveness based on three metrics—governance, substance, and outcome. Governance assesses the legal framework and the regulator’s autonomy; substance evaluates how well the regulator uses its powers; and outcome focuses on the real-world impact, including access, competition, and consumer protection.
Kenya particularly excelled in the outcome category, outshining other countries on measures such as increased energy access, enhanced competition, and stronger consumer safeguards. It came third in both governance and substance, following Senegal and Uganda.
The reforms credited with transforming Kenya’s regulatory landscape include the digitisation of Epra’s services and a streamlined licensing process, which the AfDB says have significantly reduced “red tape for energy projects.”
Epra also introduced a time-of-use tariff, allowing industrial users to pay lower rates during off-peak hours, and regained autonomy from political interference after reversing a 2022 executive directive to cut electricity tariffs by 15 percent.
“This episode highlighted the need for keeping politics out of tariff-setting; fortunately, Epra’s evidence-based approach prevailed, allowing tariffs to return to cost-reflective levels,” the report noted.
Another key development was the rollout of a net metering policy, which allows small-scale electricity producers to feed excess power into the national grid and offset their own consumption costs—encouraging decentralised energy generation.
The improved regulatory environment has contributed to increased investment in the Kenyan energy sector, with more independent power producers entering the market and national energy access rising to around 75 percent of the population.
AfDB Vice President for Power, Energy, Climate and Green Growth, Kevin Kariuki, said improved regulation across Africa is crucial to meeting the goal of halving the continent’s energy access gap by 2030.
“There has to be harmonisation of regulations if we’re going to interconnect countries to share electricity. But also, good regulation will attract private investors by creating an enabling environment,” Dr Kariuki said during the report launch.
“Public sector financing will never be enough to achieve the goals of Mission300 [connecting 300 million Africans to electricity by 2030].” Uganda’s fall in the rankings, the report noted, was not necessarily due to regression, but rather to the consistent and significant reforms made by peer countries, as well as a mix of unspecified “internal factors.”
