Kenya has put in place significant energy policies and strategies, and with strong institutions and ambitious targets, the country is well-positioned to reach its energy goals and continue its economic growth and development.

As the largest economy in Eastern Africa and a regional leader in energy development, Kenya has made remarkable progress in increasing the rate of access to electricity among its population, putting the country on track to reach universal access to electricity by 2030. Kenya has set an ambitious target in its Vision 2030 of becoming a newly industrialising middle-income country with a high quality of life by 2030. A strong emphasis is put on infrastructure development, including for energy. Kenya’s high renewable energy potential and skilled workforce position the country well for sustainable energy development.

Bioenergy, mainly traditional biomass used for cooking, accounts for nearly two‑thirds of total energy supply. Geothermal, solar, wind and hydropower are increasingly prominent in the mix, mainly used for electricity generation. Imported oil completes the energy supply and is mostly concentrated in the transport sector. Energy production, supply and consumption has been driven up by strong economic and population growth in the past decade.

The Ministry of Energy and Petroleum oversees Kenya’s energy sector, supported by various semi-autonomous governmental agencies. The sector operates under the Energy Act of 2019 and the National Energy Policy, mandated to be updated every five years. Despite strong policies, the regulatory environment remains complex. Co-ordination and alignment with other government entities and sectors remain critical for effective implementation of Kenya’s ambitious plans. Furthermore, while Kenya has improved coverage, quality and timeliness of energy balances and data, there is need for more structured and accessible energy data.

Kenya is well-positioned to maintain its role as a regional leader in renewable power generation, with geothermal presenting great potential as Kenya targets 100% renewable electricity generation and universal electricity access by 2030.

Kenya has a diverse electricity mix, with nearly 90% of generation from renewable sources, including geothermal (47%), hydro (21%), wind (16%) and solar (4%) in

2023. The country is one of the lowest-cost geothermal power developers in the world and is home to the Lake Turkana Wind Project, the largest wind farm in Africa.

The power sector has around 3.3 GW of installed generation capacity, of which 950 MW is from geothermal, over 800 MW from hydropower and almost 800 MW from wind and solar combined. The remaining capacity comes from oil, mostly in the form of diesel generators (nearly 700 MW) and bioenergy. The recent addition of geothermal (around 750 MW geothermal capacity additions in the last decade) and variable renewable capacity has supplemented existing large-scale hydropower projects.

Kenya aims to scale up biomass co-generation by 2030, focusing on industrial waste and bioethanol for clean cooking. Biogas production from municipal and livestock waste also holds promise, with about 21 000 digesters currently in operation.

Historically, progress in renewable generation was guided by a feed-in tariff programme, which since 2021 has been evolving into an auction scheme under the Renewable Energy Auction Policy to attract investment in larger projects.

The increase in variable renewable energy capacity leads to the need for energy storage systems, which can provide grid services and stability. Kenya’s electricity grid shares interconnections with Ethiopia, Tanzania and Uganda, and additional interconnectors with other East African countries can further support the exchange of power for balancing and supply. 

Addressing grid losses, increasing competition, and ensuring investment in infrastructure will be key for Kenya’s sustainable growth and universal access to electricity.

The electricity sector is state-led but open to independent players. In 2024, Kenya introduced regulations to open transmission and distribution networks to private investment, fostering competition and efficiency.

Kenya's electricity networks face substantial losses, estimated at 23% in 2023, due to technical failures, theft, and billing anomalies, causing frequent outages. Efforts to curb these losses and improve system efficiency, such as smart management systems, are being considered.

The Integrated National Energy Plan will play a critical role in aligning electricity sector planning with national energy goals, including the expansion of power generation and grid infrastructure.

The Energy Act of 2019 envisions a structure with an independent system operator and open access for new transmission and distribution licensees. 

Kenya is a leader in East Africa for expanding electricity access, increasing the rate from 37% in 2013 to 79% in 2023. The country is on track to achieve universal access by 2030, and urban electrification has already reached 100%. However, affordability of electricity remains a challenge.

The Last Mile Connectivity Project (LMCP), launched in 2015, cut the number of people without access to electricity in rural areas by almost half, from 20 million to 11 million. The project prioritises households within 600 meters of existing transformers and includes a gender component to promote women’s participation. The project aims to provide electricity to an additional 280 000 households in 2024 and 2025. Kenya has also utilised off-grid solutions, mainly solar-powered mini-grids in remote areas, to expand access. These are used by one in five households. Kenya is the largest and most mature market for solar off-grid solutions globally, and accounts for almost 74% of solar home system sales in East Africa in 2023.

Affordability remains a major challenge, with Kenya’s electricity prices among the highest in Africa, driven by inflation, the removal of subsidies, and a depreciated currency driving up inflation. In the meantime, Kenya has a vibrant innovation scene and is a regional hub for start-ups, especially in relation to energy access, which can help provide affordable options to households. The regulator introduced new tariff structures in 2023 aim to lower the cost of electricity for low-income households, representing about 70% of customers. 

Kenya has made substantial progress in increasing the clean cooking access rate from only 10% in 2013 to 31% in 2023, but 69% of households, mainly concentrated in rural areas, still rely on polluting fuels. The burden is most acute on women and children, who are exposed to indoor air pollution, and deprived of pursuing education or paid work by the time it takes to collect fuelwood.

Firewood remains the primary cooking fuel in Kenya for half of the population, followed by liquefied petroleum gas (LPG), charcoal and kerosene, with significant disparities between urban and rural households. The newly launched Kenya National Cooking Transition Strategy (KNCTS) provides a clear, integrated roadmap to reach universal access by 2028. The KNCTS envisions that by 2050, half of Kenyan households will use LPG for cooking. To make this happen, the government is removing the value-added tax (VAT) on LPG and directing all public institutions to transition to the fuel by 2025. The KNCTS also foresees that 30% will use bioethanol, partially relying on local production, and 10% will use electricity. However, the lack of affordable electric stoves and lack of access to reliable electricity hinder the uptake of electric cooking. The remaining 10% of households will use biogas and other low emission or clean burning sustainable biomass. However, VAT on improved cookstoves remains one of the highest in the region.

Affordability of cleaner fuels remains a major challenge, often leading households to revert to biomass. Soaring fuel prices in the last few years have led to a decrease in incentives and financial support for clean cooking solutions for households.

Like much of the rest of the world, adherence to traditional cooking methods, as well as the lack of awareness of alternative cooking solutions, further hinders clean cooking uptake, which the government is tackling through awareness campaigns and transitioning of public institutions.

Ensuring fuel supply and price stability is essential for the sustained use of clean cooking solutions. For long-term stability, clean cooking needs to be integrated into broader energy planning, linking it with economic growth and electricity supply strategies. 

Kenya’s growing demand in the buildings and transport sectors is making the country heavily reliant on imported oil products, leading to efforts to reduce its dependency.

To address the growing oil consumption, Kenya is focusing on efforts to limit dependence on oil product imports through energy efficiency measures, electrification of the transport sector and the promotion of biofuels, including plans to develop sustainable aviation fuels. The government also aims to develop local manufacturing of EV parts and is examining ways to establish domestic value chains for this purpose.

Kenya experiences frequent power outages, which can be addressed by strengthening and expanding the existing grid and supporting additional domestic electricity supply. Enhancing resilience of the electricity infrastructure to cyber threats and climate change is critical for strengthening Kenya’s energy security.

Kenya currently has no mining sites for critical minerals, but geological surveys have indicated potential reserves of minerals (such as copper, fluorspar, graphite, manganese, niobium and zinc) needed for clean technology manufacturing. The promotion of local processing of the minerals could benefit Kenya’s industry sector, economic growth and energy security. 

The buildings and transport sectors, which are heavily reliant on bioenergy and oil products, drive Kenya’s energy consumption with efficiency efforts required in these sectors. Kenya’s overall energy intensity has decreased by 14% from 2010 to 2023.

The 2020 National Energy Efficiency and Conservation Strategy sets ambitious targets for energy efficiency improvements including increasing the annual rate of energy efficiency improvements from 0.2% to 3% by 2025.

The buildings sector, which accounts for two-thirds of total final consumption, is largely dependent on biomass. In addition to clean cooking solutions that are helping households move away from traditional biomass, the government introduced the 2024 National Building Code to promote sustainable building practices in all buildings. Kenya has also implemented minimum energy performance standards (MEPS) for appliances, but enforcement is lacking, and the market remains dominated by lower-efficiency models.

The transport sector represents 22% of Kenya’s total final consumption (2023), primarily accounted for by petroleum products. Most vehicles in Kenya are imported as second-hand, including heavy duty vehicles and trucks. The electric vehicle (EV) market in Kenya is currently very small. However, the government aims to increase the use of EVs through incentives such as the introduction of an e-mobility tariff, reducing the excise duty on EVs and developing charging infrastructure. To improve the fuel economy standards and labelling for vehicles, the government aims to restrict the age of imported second-hand vehicles from eight to five years and implement vehicle emissions inspections.

Industry accounts for a small proportion of total energy consumption, at 12% in 2023, and has experienced slow growth. Coal (43%) and oil (17%) account for the biggest energy consumption in the sector. Efficiency efforts in the industry sector have focus on audits, capacity building, and trainings for energy efficiency professionals.

While Kenya’s contribution to global greenhouse gas emissions (GHGs) is minor, the country faces significant threats from climate change.

Policies, including the submission of Kenya’s updated Nationally Determined Contribution (NDC) in 2020, aim to reduce GHG emissions by 32% by 2030, with the energy sector to contribute 45% of these reductions. Kenya’s GHG emissions reached 21.2 Mt CO₂-eq in 2021, an increase from 14 Mt CO₂-eq in 2010, with 52% of the emissions attributed to the transport sector.

Achievement of Kenya’s GHG emissions target in the NDC is conditional on almost 80% of the required funding coming from international sources. Kenya launched its Long-Term Low Emission Development Strategy (LT-LEDS) in 2023, aiming to achieve a net-zero emission economy by 2050, but implementation remains challenging due to data, finance and human resource needs.

Kenya has issued over 50 million credits via the Clean Development Mechanism and Voluntary Carbon Market standards. Through the National Policy on Climate Finance, Kenya aims to establish a Climate Change Fund, the largest in Africa, and enhance carbon markets. Furthermore, a number of innovative initiatives exist, including direct air capture technology powered by geothermal energy, which aims to be operational in the near term.

Kenya has integrated climate resilience into its national development plans through policies such as the National Climate Change Action Plan 2023-2027, LT‑LEDS 2022-2050 and Climate Change Act (Amendment 2023), as climate change poses a threat to the country’s transport, telecommunications and water supply infrastructure, as well as energy assets. The hydropower sector is particularly vulnerable, as Kenya has experienced numerous floods and droughts over the past decade.

Kenya’s energy sector has become an attractive destination for international public and private capital. Public investment, especially in grids and rural electrification, has been crucial in driving the sector’s growth. However, the government is increasingly relying on development finance institutions (DFIs) and private investment to fund key projects due to limited fiscal space.

Kenya’s attractive policy environment for investors, along with strong growth, a large, skilled workforce and developed tech and fintech infrastructure, has made Nairobi a hub for innovators and start-ups. However, private investors still face a series of both actual and perceived risks, which limit their involvement to the more established sectors where these risks are considered lower, such as power generation and electricity access, and pushes up the cost of capital. DFIs therefore continue to play a key role in both derisking private capital and in funding areas such as grids, clean cooking and end-use sectors.

The government has an Energy Transition and Investment Plan 2023-2050 (ETIP), which can provide investors with a clear sense of the focus areas. The ETIP estimates a need for USD 600 billion in investments to 2050, with the power and transport sectors accounting for nearly 90%. To support the implementation of the ETIP, the government could develop roadmaps and clarify priorities where private sector investment is needed. Furthermore, clarification around fiscal incentives for solar products and clean cooking solutions are necessary to stimulate greater private sector investment and ensure affordable energy access.

Over the longer term, there is significant scope for the role of Kenya’s domestic financial sector to take on a larger role in the energy sector. Kenya has one of the most developed financial markets on the continent, with relatively well-capitalised commercial banks and a growing pool of institutional investor capital. In recent years, efforts have been made to blend local commercial bank capital with financing from DFIs in order to extend tenors and reduce the cost of capital. Meanwhile, on the institutional side, green bonds are being explored – with the issuance of clean cooking bonds in 2023 – as well as the creation of a local currency guarantee scheme. These developments should allow for a growth in local currency financing, which is particularly important for the growth of locally‑owned energy businesses.