Kenya has turned to Tanzania to boost electricity supply amid a rising demand and a freeze on new power purchase agreements (PPAs), underscoring its reliance on neighbouring countries to avert power rationing.
Kenya Power imported 18.86 gigawatt-hours (GWh) of power from Tanzania between December 2024 and March this year, compared to the 15.33GWh it exported to Dodoma during the same period, following completion of a line meant to enable electricity exchange between the two countries.
The economy has recorded at least nine fresh peak demands for electricity since mid-last year, with the latest one being a 2,316 megawatts (MW) in February this year as calls mount on Parliament to lift the freeze and allow Kenya Power to sign new electricity deals to boost generation.
The fast-changing peak demands have left the power distributor struggling to prevent frequent blackouts, a scenario that has since made Kenya a net importer in its electricity exchange agreement with Tanzania.
Kenya Power has repeatedly called on Parliament to expedite lifting of the moratorium on new PPAs in a bid to ensure that Kenya’s electricity supply is not overly dependent on Ethiopia, Uganda and Tanzania.
“To meet growing electricity demand, the focus should now shift towards increasing the country’s electricity generation. This will improve spinning reserves to the standard 15 percent level to cater for contingency scenarios that have increased in recent years,” Kenya Power CEO Joseph Siror said recently.
The increased imports from Tanzania come at a time when Kenya is seeking to import an additional 50-100MW from Ethiopia whenever demand peaks, given the suspension of new PPAs.
The freeze on new PPAs came into effect in 2018 as part of recommendations by a presidential taskforce, and was intended to allow for scrutiny of the existing agreements. The Cabinet lifted the moratorium in 2022 but Parliament reinstated it in April the following year.
The freeze has left Kenya in a delicate situation, with electricity demand outpacing generation and the reserve margin (spinning reserves) at less than four percent — far below the industry recommendation of between 15 percent and 35 percent.
Nairobi completed its part of the 400 kilovolts (kV) transmission line to Tanzania in December last year, paving the way for a power exchange deal between the two countries, similar to the agreement that Kenya has with Uganda.
Under a power exchange deal, the country that ends up being a net importer usually pays off the other. This means that Kenya is now buying electricity from Tanzania and Uganda.
Tanzania has become the third biggest import market of electricity after Uganda and Ethiopia, as Kenya Power turns to neighbouring economies to ensure a stable power supply amid a rising demand.
Kenya Power imported 73.62GWh of electricity from Uganda between December and March this year, nearly five times the 14.85GWh that it exported to Kampala during the same period.
However, Ethiopia remains the biggest import market of electricity for Kenya, under a 25-year deal that was started in 2022, allowing Kenya Power to source up to 200MW of power per month from the Horn of Africa economy.
