Kenya Electricity Generating Company (KenGen) is seeking regulatory approval to sell electricity directly to consumers, a move that could significantly weaken Kenya Power’s long-held monopoly over electricity distribution and retail supply.
The Energy and Petroleum Regulatory Authority (EPRA) is currently considering KenGen’s application for electricity transmission and distribution licences for its proposed Green Energy Park in Olkaria.
If approved, KenGen will be allowed to supply electricity directly to businesses and consumers operating within the geothermal energy hub, introducing direct competition into a market traditionally controlled by Kenya Power and Lighting Company (KPLC).
In a notice published in MyGov on May 26, KenGen said it would formally submit its application to EPRA on June 2 under Section 119(3) of the Energy Act, 2019.
The proposed shift follows new electricity market regulations introduced in May, which now permit power producers to distribute electricity directly to customers instead of relying solely on Kenya Power under the country’s long-standing single buyer model.
Previously, KenGen and other electricity producers were required to sell power exclusively to KPLC through Power Purchase Agreements.
Under the new framework, power generators can either develop their own transmission and distribution infrastructure or utilise existing networks owned by Kenya Power and the Kenya Electricity Transmission Company (KETRACO). In such cases, producers will be required to pay wheeling charges for using the infrastructure.
KenGen says the plan is specifically aimed at supplying electricity to firms operating within the KenGen Green Energy Park in Olkaria.
The reforms stem from the Energy (Electricity Market, Bulk Supply and Open Access) Regulations, 2026, which allow electricity producers to compete directly for large consumers, including those without existing agreements with Kenya Power.
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However, the proposed liberalisation has drawn caution from the World Bank, which warned that opening up the electricity distribution market to competition could ultimately push power prices higher for consumers.
According to the lender, electricity tariffs in Kenya have already risen faster than many other essential commodities over the past five years, and introducing multiple distributors could add further pricing pressures.
The push for market reforms has also received backing from Parliament. The National Assembly’s Energy Committee had earlier proposed allowing Independent Power Producers (IPPs) to sell electricity directly to consumers while also calling on the firms to lower tariffs and align prices more closely with KenGen’s rates.
Under the proposed model, consumers would be free to choose between Kenya Power and alternative electricity suppliers based on pricing and service delivery.
