Kenya Power is seeking to buy 100 megawatts (MW) of hydropower from Uganda under a power purchase agreement (PPA) to replace the current deal between the pair cementing Kenya as a net importer of electricity amid rising demand.
Joseph Siror, the managing director of Kenya Power, on Tuesday disclosed that the arrangement could offer Kenya with power priced at not more than $0.09 (Sh11.6 at current rates) per kilowatt-hour (kWh).
The push for a PPA with Uganda comes at a time when a spike in consumption and marginal increase in local production of electricity have forced Kenya Power to turn to imports to plug the gap.
Uganda and Kenya currently have a power exchange agreement where the country that imports more pays the other. Kenya has for the larger part being a net importer and pays Uganda an average of $0.09 per kWh.
“Uganda has hydro generators in a place called Karuma where each of them is generating 300MW and they (Uganda) have excess power. Our idea is to engage them at the earliest to get firm capacity instead of the tie-line,” Siror said.
“When you get firm capacity then you can negotiate on the prices. We currently pay them $0.09.”
Kenya Power recorded six peak demands last year alone, highlighting the fast-growing consumption that has piled pressure on the utility amid growing cases of power rationing especially during peak demands.
“There are times when the spinning reserves are razor thin, especially when wind generation is low. Over the last two months we have been forced to load shed more than in the past,” Siror added.
Increased uptake of imported power bolsters Kenya Power’s ability to supply more affordable electricity to millions of customers during the peak demand hours.
Electricity imports are the second cheapest source of power with a kWh priced at Sh8.91 behind locally-generated hydro at Sh3.27 a unit while thermal is the costliest at Sh35.09 per kWh.
Uganda commissioned the 600MW Karuma hydropower plant in September 2024. The plant, located along the Kyoga Nile, is the largest electricity generator in the neighbouring country.
A PPA with Uganda would be the second such deal, after the 25-year deal Kenya Power signed with Ethiopia Electric Power (EEP) in 2022. Kenya imported 254.7Gigawatt-hour (GWh) from Uganda in the 11 months to November last year, nearly eight times the exports of 32.68GWh in the period.
Ethiopia remains the single biggest source of electricity imports to Kenya Power, with 1,270.99GWh in the same period.
Imports from Uganda accounted for 1.8 percent of the 13,739.17GWh supplied to Kenya Power in the 11 months to November last year, with imports from Ethiopia accounting for 9.2 percent.
Besides Uganda, Kenya Power is also seeking additional power from Ethiopia to boost supply during peak demand periods. The utility initiated talks with EEP last year to get an additional 50-100MW.
