The Kenya and Ethiopia Power Deal: From 6.5 Cents to 15.5 Cents
Bottom line
Kenya Power and the Ethiopian Electric Utility signed a renewed power supply agreement in Addis Ababa in the week of 10 July 2026. Capital Ethiopia reports a tariff of 15.5 US cents per kWh. The Star reports 24.07 Ethiopian birr per kWh, about $0.15 or roughly Sh19.50, plus a demand charge. A 2022 Business Daily report put the rate at 6.5 US cents per kWh, fixed for five years before a review. If those figures describe the same price, the tariff has more than doubled. Neither report publishes the volumes or the term of the renewed deal, so the cost to Kenyan consumers cannot be assessed.
The parties and the instrument
The instrument is a power purchase agreement between two state utilities. It renews an arrangement that traces to a 2012 agreement allowing imports of up to 400 MW once transmission was complete. Imports of 200 MW began in November 2022. The existing arrangement is described as covering 200 MW rising to 400 MW after an initial three year period, over an interconnector of 2,000 MW capacity. The original agreement is described as running 25 years.
The constitutional and treaty backdrop
A contract between two utilities is not obviously a treaty, and this brief does not treat it as one. Article 201 of the Constitution requires openness and accountability in public finance, and Article 35 provides a right of access to information. The question is whether a long term import commitment that sets what Kenyan consumers pay is open to parliamentary and public scrutiny.
The Delta
| What the public account emphasised | What the text or record shows | Assessment |
|---|---|---|
| A renewed deal that secures cheap regional power | Reported tariff of 15.5 US cents per kWh, against 6.5 cents cited in 2022, plus a monthly demand charge of about $6.52 | material change, not explained |
| Savings of nearly $10 million a year | The same figure was a World Bank estimate for the first year of imports at the earlier price | unreconciled with the new tariff |
| A renewed term | Volumes, duration, review and take or pay terms are not disclosed | material omission |
Whether 6.5 cents was ever the contract price
Capital Ethiopia says 6.5 cents was "initially cited in early 2022" and does not call it a prior contract rate. Business Daily reported in October 2022 that the rate would be fixed for five years with a review only after that. The two reports are consistent with each other and with a large increase, but the contracts are needed to confirm it.
The power reading
Ethiopia is the seller of a surplus and holds the stronger position on price once Kenya has built reliance on the line. Kenya's leverage lies in the size of its demand and in the alternatives it can still buy. The undisclosed term decides who bears the risk if demand or hydrology changes.
What to watch
- Publication of the volumes, duration and review terms by Kenya Power or the Ministry of Energy.
- The effective tariff on Kenya Power bills and in the fuel energy cost charge.
- Any parliamentary question on the change from the 2022 rate.
Sources
- Kenya deepens Ethiopian power imports in fresh supply deal, The Star, 13 July 2026.
- Kenya Power to pay 15.5 cents per kWh in newly finalized Ethiopia energy deal, Capital Ethiopia, 10 July 2026.
- Kenya Ethiopia power buy deal to vary after five years, Business Daily, 16 October 2022.
- Constitution of Kenya, 2010, Articles 35 and 201.
Corrections
None to date.