Kenya is increasingly relying on electricity imports from Ethiopia as domestic demand grows and affordable supply becomes harder to secure. For instance, the East African country imported a record 1,274 gigawatt-hours of electricity from its northern neighbor in the fiscal year ending June 2025, underpinned by a 25-year power purchase agreement and a $1.26 billion transmission line. Ethiopian hydropower is cheap; it costs roughly $0.066 per kilowatt-hour compared with up to $0.23 per kilowatt-hour from local thermal plants. Consequently, Kenya saves an estimated $10 million annually by importing Ethiopian power. However, critics question spending $86 million annually on imports rather than domestic infrastructure. Supporters counter that imports complement domestic generation and should be encouraged. More importantly, experts argue that regional power trade could play a major role in Africa’s broader goal of creating an integrated continental electricity market, which will engender competition and drive down costs.
African Business
