Kenya Power is in talks to secure 100 megawatts of hydropower from Uganda through a new power purchase agreement, a move that would replace the current power exchange arrangement and further entrench Kenya’s position as a net electricity importer as demand continues to climb.
Kenya Power managing director Joseph Siror said the proposed deal could deliver electricity at a cost of no more than $0.09 (about Sh11.6) per kilowatt-hour. He noted that rising consumption, coupled with only marginal growth in domestic generation, has increasingly forced the utility to rely on imports to bridge supply gaps.
Kenya and Uganda currently operate a power exchange system under which the country importing more electricity compensates the other. Kenya has largely been on the buying end, paying Uganda an average of $0.09 per unit. Siror said Uganda has surplus hydropower from its Karuma facilities, where individual generators produce about 300MW, making the case for shifting to a firm-capacity agreement rather than relying on the existing tie-line arrangement.
Securing firm capacity, he explained, would allow Kenya Power to negotiate better pricing. The utility has faced mounting pressure from surging demand, recording six peak demand incidents last year alone. Siror said reserve margins have at times been dangerously thin, particularly when wind generation dips, forcing more frequent load shedding in recent months.
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Imported electricity has become a key cushion during peak hours. It is currently the second-cheapest source of power at Sh8.91 per kilowatt-hour, behind locally generated hydropower at Sh3.27, while thermal power remains the most expensive at Sh35.09 per unit. Uganda commissioned the 600MW Karuma Hydropower Plant in September 2024, now the country’s largest power station.
A deal with Uganda would mark Kenya Power’s second long-term cross-border agreement, following a 25-year power purchase deal signed with Ethiopia Electric Power in 2022. In the 11 months to November last year, Kenya imported 254.7 gigawatt-hours from Uganda, nearly eight times the 32.68GWh it exported over the same period.
Ethiopia remains Kenya’s largest source of imported electricity, supplying 1,270.99GWh in that timeframe. Power from Uganda accounted for 1.8 percent of the 13,739.17GWh supplied to Kenya Power, compared with 9.2 percent from Ethiopia. Beyond Uganda, Kenya Power is also seeking to boost imports from Ethiopia, having opened discussions last year for an additional 50 to 100MW to stabilise supply during peak demand periods.
