Kenya is biggest foreign buyer of Ethiopian power
A general view of the site of the Grand Ethiopian Renaissance Dam (GERD) in Guba, Ethiopia, on February 19, 2022.
Kenya is the biggest foreign buyer of electricity from Ethiopia after purchasing power worth 3.63 billion Birr (Sh1.634 billion) in the year ended July 2024, underscoring the critical role the African nation plays in ensuring a stable supply in Kenya.
Electricity purchases for the period under review were a rise of nearly three times from the 1.32 billion Birr (Sh514.48 million) worth of units bought the previous year when Kenya trailed Sudan and Djibouti in tapping power from Ethiopia.
Kenya started importing electricity from Ethiopia in 2022, in a 25-year deal. The power is priced at 6.50 US cents per kilowatt-hour (kWh), making it lower than what Kenya Power locally sources from independent power producers.
Imports from Ethiopia have been critical in ensuring a stable Kenya Power grid and came in handy, especially when Kenya grappled with a ravaging drought that cut hydro generation at the start of 2023.
“Ethiopia supplies approximately 10 per cent of electricity to Kenya’s grid, enabling Kenya to meet its growing energy demands by ensuring a stable and reliable power supply while leveraging Ethiopia’s vast renewable resources to diversify its energy mix,” Kenya Power CEO Joseph Siror said recently.
Electricity sales
Electricity sales to Kenya accounted for 13.4 per cent of the 27.04 billion Birr that Ethiopia Electric Power (EEP) reported as revenue from electricity sales in the year to July 2024.
The Ethiopian deal is meant to help Kenya keep off the expensive thermal plants by ensuring buffers amid a demand rise.
Djibouti is the second biggest buyer of power from Ethiopia, having bought 1.97 billion Birr worth of electricity in the year ended July 2024 followed by Sudan at 767.76 million Birr.
In the year ended July 2023, Djibouti was the biggest buyer of electricity from Ethiopia with units valued at 2.33 billion Birr while Sudan was second after purchasing power worth 1.86 billion Birr.
Under the 25-year power import deal with Ethiopia, Kenya Power is taking a maximum capacity of 200 megawatts in the first three years, rising to 400MW for the remaining period.
Power from Ethiopia is the third cheapest source behind locally-generated hydro and geothermal.
Kenya Power is however free to renegotiate the prices with EEP from 2027 at the earliest. This is based on a clause in the contract that allows for varying prices for five years from 2022.