Kenya Power will take up an extra 200 megawatts (MW) of power in December 2026 under a power purchasing agreement (PPA) with Ethiopia to plug a gap in supply.
Kenya Power currently has a running 20-year PPA with the Ethiopian Electric Power (EEP), which was signed in 2022, allowing for the supply of 200MW of electricity priced at $0.65 cents per kilowatt hour (kWh), or approximately Sh84.03 per kWh.
“We are taking up an additional 200 megawatts in December, at the same price. The 200 megawatts that Kenya is going to buy from Ethiopia from December, to bridge the generation and supply gap,” David Syengo, General Manager in charge of network management, told Business Daily.
This means that from December 2026, Kenya Power will tap a total of 400MW of electricity under the agreement with EEP. Kenya will take up 400MW at peak times but cut uptake to 150MW during off-peak times. In the present PPA, Kenya Power takes up 200MW at peak times and 65MW off-peak.
This extension announcement comes at a time when power demand is actively surging in Kenya, outpacing supply of locally generated power.
Kenya's peak electricity demand reached a record 2,439 MW in December 2025, driven by rising industrial use, urban growth, and new household connections. Domestic supply faces tightening margins, prompting increased reliance on regional imports and alternative commercial self-generation.
Industrial and large commercial customers account for over half of total unit sales. The critical window for maximum system pressure occurs daily between 1900 and 2100 hours.
Conversely, domestic generation reached 3.45 billion kWh in early 2026, but consumption grew faster at 9 percent year-on-year.
Intermittent renewable sources like wind and solar force occasional grid balancing and reliance on imports.
In recent years, Kenya has deepened its reliance on Ethiopia to avert blackouts and imported 1,274.42 gigawatt-hours (GWh) in the year ended June 2025.
The increased power shipments have made Ethiopia the third biggest source of electricity to Kenya Power with a share of 9.88 percent last year, behind Lake Turkana Wind Power at 9.97 percent and KenGen at 57.49 percent.
Kenya then turned to Ethiopia to prevent a full-blown crisis. The two countries signed a deal in 2022, paving the way for Ethiopia to supply up to 200MW of cheap power to the national grid.
Cheap hydropower from Ethiopia has helped Kenya to meet the fast-growing demand, without burdening consumers with steep bills in the past three years. Central to that transformation is the Grand Ethiopian Renaissance Dam (GERD), which has more than doubled the country’s installed electricity generation capacity over the past seven years, from 4,462MW to 9,752MW.
