Kenya’s Growing Reliance on Ethiopian Electricity
In the fiscal year ending June 2025, Kenya imported a record 1,274.42 gigawatt‑hours (GWh) of electricity from Ethiopia, according to the Energy Petroleum and Regulatory Authority (EPRA) [[1]]. By contrast, imports from Uganda and Tanzania amounted to just 225.64 GWh and 33.79 GWh respectively, underscoring a clear shift toward Ethiopian power as a cornerstone of Kenya’s supply strategy.
The Ethiopia‑Kenya High‑Voltage Interconnector
This surge in trade is enabled by a 25‑year Power Purchase Agreement (PPA) signed in 2022 between Kenya Power and Ethiopia Electric Power (EEP). The agreement coincides with the completion of the 1,045‑kilometre high‑voltage direct current (HVDC) line linking Wolayita Sodo in Ethiopia to the Suswa substation in Kenya [[2]]. Financed chiefly by the World Bank and the African Development Bank, the US$1.26 billion project can transmit up to 2,000 MW, providing ample headroom for both countries’ growing needs.
Demand Outpaces Domestic Generation
Kenya’s peak electricity demand reached 2,411.98 MW in October 2025, while the nation’s installed capacity stands at 3,846.80 MW [[3]]. The resulting reserve margin of roughly 434 MW is thin, especially when factoring in the variability of renewable output. EPRA Acting Director General Joseph Oketch notes that “installed capacity does not equal available capacity,” highlighting how weather‑dependent solar and wind can dip below expected levels, necessitating reliable imports [[4]].
Kenya’s Current Energy Mix
- Geothermal: 943.7 MW (25.9 %)
- Hydropower: 872.6 MW (24.0 %)
- Thermal (fossil fuel): 627.1 MW (17.2 %)
- Solar: 514.1 MW (14.1 %)
- Wind: 436.1 MW (12.0 %)
- Bioenergy: 163.8 MW (4.5 %)
Despite a strong renewable foundation, the intermittent nature of solar and wind leaves gaps that thermal plants have traditionally filled—often at high cost and environmental impact.
Cost and Cleanliness Advantages of Ethiopian Power
Ethiopian hydropower is both cheaper and cleaner than Kenya’s thermal alternatives. EPRA estimates that importing Ethiopian electricity saves Kenya about US$10 million annually compared to domestic heat generation [[5]]. The price differential is stark:
- Thermal IPPs: up to US$0.23 per kWh
- Ethiopian hydropower: approximately US$0.066 per kWh
These low rates stem from Ethiopia’s abundant water resources, which enable inexpensive hydropower production. Consequently, Kenyan industrial tariffs—averaging US$0.18‑0.23 per kWh—are markedly higher than Ethiopia’s industrial rate of roughly US$0.05 per kWh, a disparity that has prompted some manufacturers to relocate to Ethiopia, Egypt, or Morocco in search of lower energy costs [[6]].
Ethiopia’s Export Boom and the Grand Ethiopian Renaissance Dam
For Ethiopia, electricity exports have become a vital source of foreign exchange. In the 2024/25 fiscal year, EEP earned US$118.1 million from power sales to neighboring markets, with Kenya accounting for US$86.3 million (about 73 % of total export revenue) [[7]]. Djibouti and Sudan contributed US$30.9 million and US$0.9 million respectively, while trial shipments to Tanzania signal Ethiopia’s ambition to evolve into a regional energy hub.
The country’s generation capacity more than doubled after the Grand Ethiopian Renaissance Dam (GERD) reached commercial operation in late 2025, adding 5,150 MW of hydropower and pushing total installed capacity to roughly 9,600 MW [[8]]. In the same period Ethiopia generated over 29,000 GWh, exceeding its annual target of 25,000 GWh and exporting about 7 % of that output.
Domestic Electrification Challenges in Ethiopia
Despite its export success, household electrification within Ethiopia remains low. The 2025 Ethiopian Energy Access Survey, conducted jointly with the World Bank, found that approximately 56 % of Ethiopians still lack access to basic electricity services [[9]]. Government officials argue that revenue from power exports is essential for financing grid expansion and accelerating last‑mile connections. Ethiopia’s national target is to achieve 75 % electrification by 2030, a goal supported by the World Bank and African Development Bank’s Mission 300 initiative.
Looking Ahead
Kenya’s increasing reliance on Ethiopian hydropower illustrates a pragmatic response to domestic supply constraints: securing affordable, low‑carbon power while preserving fiscal space for renewable expansion. For Ethiopia, leveraging its vast water wealth through projects like the GERD not only fuels regional trade but also generates the hard currency needed to close its own electrification gap. As both nations continue to invest in cross‑border infrastructure and renewable technologies, the Ethiopia‑Kenya power corridor is poised to become a model of mutually beneficial energy cooperation in East Africa.
[[1]] Energy Petroleum and Regulatory Authority (EPRA). “Kenya Electricity Import Statistics FY 2024/25.” Nairobi, 2025.
[[2]] World Bank. “Ethiopia‑Kenya HVDC Interconnector Project Completion Report.” Washington, DC, 2023.
[[3]] EPRA. “Kenya Installed Capacity and Peak Demand Overview.” Nairobi, 2025.
[[4]] Oketch, J. (Acting DG, EPRA). Interview with African Business, March 2025.
[[5]] EPRA. “Cost‑Benefit Analysis of Ethiopian Hydropower Imports vs. Domestic Thermal Generation.” Nairobi, 2025.
[[6]] African Development Bank. “Industrial Electricity Tariffs in East Africa: Comparative Study.” Abidjan, 2024.
[[7]] Ethiopia Electric Power (EEP). “Annual Report 2024/25.” Addis Ababa, 2025.
[[8]] International Hydropower Association. “Grand Ethiopian Renaissance Dam Operational Status.” London, 2025.
[[9]] World Bank & Ethiopian Ministry of Water, Irrigation and Energy. “Ethiopia Energy Access Survey 2025.” Washington, DC, 2025.
