After seven years of a moratorium, Kenya has seen minimal new power plants onboarded to the grid. Unfortunately, it took a crisis to lift the moratorium despite the warnings for a while now.
Be that as it may, we are all glad that the summons and restrictions are now behind us—stakeholders in the electricity space will tell you they are now a little too familiar with two legislative houses, the carpets and seats, thanks to the summons they’ve had to attend to over the seven years.
In Kenya, the private sector accounts for 35 percent of the current installed capacity. To add to that, they also account for $2.2 billion in foreign direct investment in the electricity sector alone.
In the just-released Energy Compact 2025-2030, the government is seeking more involvement of the private sector beyond power generation.
With an urgent need to improve the transmission infrastructure in Kenya, the government is seeking nearly $1 billion from the private sector out of the $250 million that Kenya Electricity Transmission Company needs per year, for the next 20 years.
The urgency to improve our transmission infrastructure has never been so urgent, more so with the country at the forefront of the regional power pool conversation.
In addition to that, the government is also targeting more than $2 billion for the generation capacity in the same timeframe. This translates to double the current private investment of independent power producers (IPPs) in the country today. This not only requires collaboration with the private sector, but it also signals confidence in the private sector.
In most economies, the private sector has been known to lead the technology development front.
The balance of maintaining a good reputation and efficiency forces the private sector to deliver. Most world-changing developments in different fields have been led by the private sector. It is no different in the energy sector.
In the spirit of collaboration and utilising the private sector in Kenya, the Public-Private Partnerships (PPP) Directorate, in its framework, seeks to “accelerate infrastructure delivery by leveraging private sector efficiency and innovation.”
Recently, President William Ruto made pronouncements of developing 10GW of power. While this is overly ambitious compared to our current 3GW installed capacity, it is visionary.
And while the sector is finally aligned on the need for new generation capacity, it is also a good time to align these ambitions with a proper framework. Generation must, however, always be coupled with demand.
The Least Cost Power Development Plan is a good guide for the sector as it is informed largely by the realities of our economy and times. One thing time has made clear for us today is the need for proper data to make predictions and plans for the future.
Population growth is predicted to continue rising, and power demand has steadily grown by 7.4 percent in 2024-25 alone; the call for more generation well aligns with the need for it.
Unlike the case of the egg and chicken on who came first, demand and generation must go hand-in-hand. It will be unwise to build capacity without an assured uptake in the end. If anything, it will be way more expensive for the country in the end, and the investor confidence in this case is wanting.
One thing about capital is that it loves security. We’ve already established what we need. We know how to get it. What we now need is to assign the risks accordingly. Lay out the structures and policies, and the blessed assurance of return on investment will be a reality.
Peninah Njakwe is the Head of Programmes & Communications, Electricity Sector Association of Kenya
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