The power industry in Kenya is fully unbundled, both vertically and horizontally. It consists of generation, transmission, distribution and retail segments, and includes participants from both the public and private sectors.

The principal law governing the ownership and structure of the power industry in Kenya is the Energy Act (Cap. 314), which was enacted to align the energy sector with the Energy Policy, 2018 (now replaced with the National Energy Policy 2025–2034) and the devolved functions of the national and county governments in accordance with the Constitution of Kenya 2010.

The generation of electricity in Kenya is dominated by the majority state-owned Kenya Electricity Generating Company PLC (KenGen), which produces approximately 54% of the power generated in Kenya. Other players in this segment include Independent Power Producers (IPPs), the Rural Electrification and Renewable Energy Corporation (REREC), several off-grid generation licensees and, more recently, privately owned power utility companies.

The transmission of electricity is undertaken by the Kenya Electricity Transmission Company Limited (KETRACO), which is mandated to operate high-voltage transmission lines of 132kV and above.

The distribution and supply segment is dominated by Kenya Power & Lighting PLC (Kenya Power), which is responsible for the procurement of power, including from projects under the Feed in Tariff (FIT) Policy, and for the negotiation of power purchase agreements (PPAs) with IPPs and neighbouring states. It also historically served as the retailer and system operator, in addition to owning and operating part of the transmission infrastructure and the entire distribution network in the country. Over the last few years, the distribution segment has seen the introduction of privately owned distribution and electricity retail players.

Kenya’s Battery Energy Storage System (BESS) market remains at an early implementation stage, despite strong policy backing to support renewable integration and grid stability. KenGen is leading deployment as the implementing agency for the World Bank‑funded Kenya Green and Resilient Expansion of Energy (GREEN) programme, which includes a planned 100 MW grid-scale BESS, currently at feasibility and procurement stage. A pilot 1.16 MWh BESS commissioned in July 2025 powers KenGen’s 52 KW Modular Data Centre at its head offices in Nairobi, a facility comprising 356 U-spaces, purpose-built to support KenGen’s growing digital infrastructure. Overall, Kenya is transitioning from pilot deployment to its first utility-scale BESS installations.

The principal state-owned players in the generation, transmission and distribution segments include the following.

• KenGen is 70% owned by the government of Kenya and is listed on the Nairobi Securities Exchange. It accounts for slightly over 54% of electricity generated.
• Geothermal Development Company (GDC) is wholly owned by the government and was established to carry out geothermal exploration, production drilling and management of steam fields.
• Nuclear Power and Energy Agency (NUPEA) is wholly owned by the government and is responsible for overseeing research and development of nuclear electricity generation in Kenya.
• KETRACO is 100% state-owned and is responsible for the planning, design, construction, ownership, operation and maintenance of electricity transmission lines (132kV and above). It is the designated System Operator.
• Kenya Power is listed on the Nairobi Securities Exchange, with the government of Kenya holding a 50.1% stake in the entity. It serves as the main distributor and supplier of electricity in the country, accounting for approximately 95% of electricity sales.
• REREC is wholly owned by the government of Kenya and is charged with the expansion of rural electrification. It serves as the lead agency responsible for the development of renewable energy resources (other than geothermal and large hydropower), and accounts for about 1.5% of generated electricity.

On the investor side, IPPs currently account for approximately 37% of generated power from various technologies, including wind, solar, thermal, hydro, biogas and biomass. Furthermore, a total of 560 MW of captive power utilising thermal, solar and wind technologies is generated by over 90 private investors. Finally, there are privately owned distribution, supply and retail companies, mostly serving large-scale mixed-use developments, including Tatu City and Two Rivers.

Foreign Investment

Foreign investment in Kenya is governed primarily by the Investment Promotion Act (Cap. 485) and the Foreign Investments Protection Act (Cap. 518), which collectively establish the legal framework for the entry, protection and facilitation of foreign capital. Kenya maintains a broadly liberal investment regime, notably with no sector-specific restrictions on foreign ownership in the power industry. Foreign investors may therefore participate fully in generation, transmission, distribution and supply activities, subject to compliance with licensing requirements under the Energy Act and approvals from the Energy and Petroleum Regulatory Authority (EPRA).

Local Registration Obligations

Despite the absence of ownership restrictions, foreign investors must comply with certain local establishment requirements. Any foreign entity seeking a licence under the Energy Act is required to establish and maintain a registered office in Kenya for the duration of the licence. In practice, generation licences typically extend for approximately 25 years, while distribution licences average 20 years, requiring long-term local presence.

Where projects are implemented through public-private partnerships (PPPs), the Public Private Partnerships Act (Cap. 430) requires investors to incorporate a special purpose project company in Kenya under the Companies Act. This ensures that the project has a locally registered vehicle for regulatory compliance, taxation and contractual accountability.

Local Content Plan

The Energy Act imposes local content obligations on licensees, requiring the preparation and implementation of a Long-Term Local Content Plan. Local content is defined as the value added to the Kenyan economy through the use of local labour, goods, services and capacity development. Under this framework, licensees are expected to prioritise:

• locally manufactured goods and services, where they meet the standards set by the Kenya Bureau of Standards (KEBS);
• employment of qualified Kenyan personnel across all levels of the project value chain; and
• capacity building, including on-the-job training and skills transfer to Kenyan workers.

The proposed Local Content Bill, 2025 seeks to further strengthen these requirements by introducing mandatory thresholds, including 60% local sourcing of goods and services and 80% local employment. It also emphasises technology transfer and support to local enterprises. While these measures are expected to boost domestic economic participation and industrial growth, they may increase compliance costs and affect project timelines, particularly for capital-intensive energy investments.

Land Ownership

Foreign participation in energy projects must also comply with Kenya’s land ownership framework. Under Kenyan law, foreign nationals and foreign-owned entities may only hold land on a leasehold basis, with a maximum term of 99 years, and only in respect of non-agricultural land.

For energy projects such as solar or wind farms, developers must obtain:

• development permission under the Physical and Land Use Planning Act; and
• where applicable, a change of user approval to convert agricultural land to industrial or energy use.

These requirements ensure proper land use planning and alignment with national and county-level development priorities.

Protection From Expropriation

The Constitution of Kenya provides strong protections against expropriation, safeguarding property rights for both domestic and foreign investors. Property may only be compulsorily acquired in limited circumstances, such as for public purpose, national security or infrastructure development, and must be accompanied by prompt and full compensation.

These protections are reinforced under the Foreign Investments Protection Act, which guarantees that approved investments cannot be expropriated except in accordance with the law and subject to fair compensation. The Land Act (Cap. 280) further establishes the procedural requirements for compulsory acquisition, including valuation, due diligence and compensation prior to possession by the state.

General Incentives

Kenya provides a range of general incentives to attract investment, particularly through the Investment Promotion Act and the work of the Kenya Investment Authority (InvestKenya). Investors who obtain an Investment Certificate benefit from:

• facilitation of licensing processes across government agencies;
• support in securing work permits for expatriate staff; and
• access to incentives under specialised regimes such as the Nairobi International Financial Centre (NIFC).

The NIFC framework offers significant advantages, including:

• protection against nationalisation and expropriation;
• free repatriation of profits and capital;
• flexibility in hiring foreign personnel; and
• 100% foreign ownership of qualifying entities.

Energy Sector Incentives

In addition to general incentives, Kenya’s energy sector provides targeted fiscal and regulatory support. Renewable energy projects benefit from:

• VAT exemptions and zero-rating on certain equipment under the Value Added Tax Act;
• import duty relief under the East African Community Customs framework, reducing capital expenditure; and
• regulatory certainty through EPRA’s approval of tariffs and contracts.

The Energy Act supports investment by establishing a clear licensing regime and enabling instruments such as PPAs and feed-in tariffs, which provide long-term revenue certainty.

Recent policy developments also include incentives for emerging sectors. For example, electric mobility initiatives, supported by discounted electricity tariffs and the National Electric Mobility Policy, 2026, offer additional opportunities for investors, including tax incentives and infrastructure support.

Dispute Resolution

Kenya’s legal framework provides robust mechanisms for dispute resolution. The Constitution requires courts and tribunals to uphold principles of access to justice, efficiency and fairness, while also promoting alternative dispute resolution methods such as mediation and arbitration.

Arbitration is governed by the Arbitration Act and the Nairobi Centre for International Arbitration Act, providing a modern and investor-friendly dispute resolution environment. Kenya is a signatory to key international conventions, including:

• the New York Convention, enabling the enforcement of foreign arbitral awards; and
• the ICSID Convention, providing a framework for investor-state dispute settlement.

These instruments ensure that foreign investors have access to neutral, enforceable and internationally recognised dispute resolution mechanisms, enhancing investor confidence in Kenya’s power sector.

Subject to prior approval by EPRA, entities operating within Kenya’s power sector may dispose of assets through a range of mechanisms, including sale, transfer, merger, lease or other restructuring arrangements. The disposal of generation, transmission and distribution assets is governed by an integrated legal and regulatory framework that is designed to ensure transparency, market stability and continued service reliability.

Under the Energy Act, the Energy (Licensing) Regulations and applicable licence conditions, licensees must obtain EPRA approval before undertaking material transactions affecting their assets or corporate structure. This includes any disposal of assets, changes in ownership or capital restructuring. In particular, approval is required where a transaction results in a third party acquiring more than 25% shareholding, a change of control, or any increase or reduction in authorised or paid-up capital. These requirements ensure that EPRA retains oversight over strategic changes that could affect the integrity, performance or financial viability of licensed entities.

The Energy (Electricity Market, Bulk Supply and Open Access) Regulations, 2026 further reinforce this framework by introducing operational safeguards that indirectly regulate acquisitions. Although these regulations do not impose formal “fit-and-proper” tests on acquirers, they require any participant in the electricity market to operate through a licensed entity and comply with all licence conditions. Key commercial arrangements such as bulk power supply agreements must be submitted to EPRA for approval prior to implementation. In addition, access to transmission and distribution networks is subject to a multi-stage approval process, including technical evaluation by the relevant network service provider, a “no-objection” from the system operator, and final EPRA approval of the associated wheeling or access agreement. These layered approvals ensure that only technically competent and financially capable parties can effectively acquire and operate sector assets.

Beyond sector-specific regulation, general corporate and competition laws also apply. The Companies Act governs mergers, amalgamations and share transfers, while the Competition Act requires mandatory notification to the Competition Authority of Kenya (CAK) for qualifying mergers. CAK assesses whether a proposed transaction may substantially lessen competition, and may approve, reject or approve it subject to conditions. Transactions below prescribed thresholds may be exempt from notification. For publicly listed entities, the Capital Markets Act imposes additional disclosure and approval requirements.

Where assets are owned by state-owned or government-linked entities, disposal must comply with the Public Procurement and Asset Disposal Act and the Public Finance Management Act, with oversight from the Public Procurement Regulatory Authority. These laws impose strict procedures to ensure fair value, transparency and accountability in the disposal of public assets.

Tax implications also arise under the Income Tax Act, which governs the treatment of gains arising from asset sales, including potential capital gains tax liabilities.

A further layer of regulatory assurance lies in ongoing licence compliance and reporting obligations. Licensees are required to demonstrate financial, technical and operational capability at the licensing stage, and must continue to provide EPRA with annual audited financial statements and performance reports. These obligations ensure continuous monitoring of the licensee’s capacity to meet its obligations.

Importantly, any new acquirer of electricity assets must satisfy EPRA that it possesses the necessary technical expertise and financial capacity to operate the undertaking. The acquirer must comply with all licence conditions and assume ongoing reporting and operational obligations.

Overall, asset disposals and acquisitions in Kenya’s power sector are governed by a multi-layered regulatory regime, combining sector-specific approvals, competition oversight, corporate law requirements and public accountability frameworks, all aimed at ensuring that transfers do not undermine reliability, competition or consumer interests.

The Ministry of Energy and Petroleum is mandated to develop a five-year Integrated National Energy Plan (INEP), and provides strategic direction to facilitate growth of the energy sector, while the Energy (Integrated National Energy Plan) Regulations, 2025 provide a framework for a co-ordinated approach in energy planning in Kenya. National energy service providers are required to develop plans for the provision of energy services, while county governments are obliged to develop county energy plans, taking into account the national energy policy and all viable energy supply options.

The INEP serves as an energy sector inter-governmental guide on the short-, medium- and long-term energy requirements, based on evolving economic, socio-political and technical issues, to ensure the delivery of reliable energy. It is reviewed every three years. The Cabinet Secretary is tasked with preparing and publishing annual reports highlighting the progress of its implementation.

County governments are charged with the preparation of County Energy Plans incorporating petroleum, renewable energy and electricity master plans. They are also required to undertake physical planning relating to energy resource areas such as dams, solar and wind farms, municipal waste dumpsites, agricultural and animal waste, ocean energy, woodlots and plantations for the production of bio-energy feedstock, as well as the facilitation of energy demand by planning for industrial parks and other energy-consuming activities.

Kenya Power co-ordinates electricity planning in the sector through the Least Cost Power Development Plan (LCPDP), with the most recent plan covering the period 2024–2043. The LCPDP details planned generation and transmission infrastructure based on projected electricity demand and least-cost technology options.

The following regulations have been passed in the last year.

• The Energy (Electricity Market, Bulk Supply and Open Access) Regulations, 2026 commenced on 8 May 2026 and mainly provide a framework for the establishment of a competitive electricity market and non-discriminatory open access to the transmission and distribution system by licensees and consumers.
• The Energy (Solar Water Heating) Regulations, 2025 commenced on 9 July 2025 and provide for the licensing of solar water heating system workers, manufacturers, importers, vendors and contractors, and the design, installation, testing, commissioning, repair and maintenance of solar water heating systems.

In November 2025, the Parliamentary Departmental Committee on Energy submitted an Addendum Report to the National Assembly outlining reforms aimed at improving efficiency, transparency and affordability in Kenya’s power sector. A key recommendation was the lifting of the moratorium on new PPAs, subject to strengthened safeguards, including:

• the adoption of competitive procurement mechanisms, particularly auctions for wind, solar and battery energy storage systems;
• greater transparency in tariff-setting through regular publication and review of indicative tariffs; and
• mandatory legal review of PPA amendments by the Attorney General.

The Committee also proposed more flexible currency structuring to better match local and foreign cost components.

The report placed strong emphasis on infrastructure development, including prioritising transmission expansion and encouraging public-private partnerships for both generation and transmission projects. Institutional reforms were also proposed, such as establishing an independent IPP procurement office and transferring electrification programmes to REREC, allowing Kenya Power to transition toward a more commercially focused model.

Additional recommendations included:

• accelerating off-grid electrification under the Kenya Off-Grid Solar Access Project (KOSAP);
• introducing preferential tariffs for Special Economic Zones;
• creating a land valuation index to reduce project delays; and
• strengthening governance through legislative amendments and improved contractor oversight.

Implementation was designed as a phased process, with actions spread across three, six, nine and 12 months, and longer-term measures extending up to 36 months, supported by semi-annual reporting.

In parallel, EPRA introduced significant regulatory changes. In January 2026, it revoked existing guidelines governing returns on equity (ROE), return on investment (ROI), feed-in tariffs and benchmark tariffs, removing standardised approaches to tariff-setting. Earlier updates in 2024 had already tightened tariffs while adjusting ROE benchmarks. This shift reflects a transition toward a market-oriented framework, relying more on case-by-case approvals, competitive procurement and negotiated tariff structures.

A unique feature of Kenya’s power industry is its reliance on renewable energy sources, including geothermal, wind, solar and hydro power, which comprise close to 85% of installed capacity, with a target of 100% by 2030. in particular, Kenya was the first and leading African country to tap into its geothermal resources, ranking as the 6th largest producer globally, with over 988 MW installed capacity.

Notably, the LCPDP records that all diesel and gas oil power plants are expected to be decommissioned by 2035.

The Energy Act empowers EPRA, in consultation with the Ministry of Energy and Petroleum, to periodically review the electricity market to enhance competition, improve efficiency, strengthen reliability and security of supply, and ensure better quality of service among licensees.

Under the Energy (Electricity Market, Bulk Supply and Open Access) Regulations, the electricity market is structured into wholesale and retail segments, each covering both capacity and energy markets. Market participants include the system operator, generators, transmission and distribution licensees, retailers, consumers, and eligible consumers, reflecting a multi-buyer, multi-seller framework.

Electricity pricing in Kenya is still largely determined through long-term contractual arrangements, particularly PPAs, which are subject to EPRA approval. These contracts typically include capacity payments on a take-or-pay basis and variable energy charges. While the regulatory framework provides for competitive energy and capacity markets, these remain at an early stage of development and have not yet evolved into fully competitive trading platforms. Transmission and distribution charges are regulated and applied through approved tariff methodologies, rather than nodal pricing.

A key development is the introduction of open access and eligible consumers, allowing large users meeting specified thresholds to procure electricity directly from licensed generators while using national networks upon payment of wheeling charges. This framework promotes competition, particularly for energy-intensive industries such as manufacturing and data centres.

Imports and exports of electricity are permitted, subject to licensing by EPRA.

Electricity imports account for 6.4% of the energy mix under a 200 MW PPA with Ethiopian Electric Power (EEP) and bilateral energy exchange contracts with Uganda Electricity Transmission Company Limited (UETCL) and Tanzania Electric Supply Company Limited (TANESCO).

All tariffs and ancillary costs in PPAs require prior approval by EPRA. End user pricing is influenced by pass-through charges, which are implemented to cover additional expenses incurred in the provision of the generation, transmission and distribution of electricity that are not included in the base tariff. These include the Fuel Energy Charge, Foreign Exchange Rate Fluctuations Adjustments (FERFA), the Water Resource Authority (WRA) levy, inflation adjustments, and taxes and levies.

The installed generation capacity as of June 2025 was 3,840.8 MW, comprising interconnected capacity alongside 603.8 MW of captive capacity and 45.0 MW of off-grid capacity. Captive power accounts for 15.72% of total installed capacity and is dominated by solar PV (49.76%) and bioenergy (26.80%).

The current capacity mix is already highly renewable, exceeding 80%, with geothermal (940 MW), hydro (839 MW), wind (435.5 MW) and solar (210.3 MW) forming the backbone, alongside 564.8 MW of thermal and 200 MW of imports. Total generation stood at 14,472 GWh, with geothermal as the leading source, followed by hydro and wind.

Under the Kenya National Energy Compact (2025–2030), the country targets a transition to a near-100% renewable energy system by 2030. This includes scaling up solar and wind to significantly larger shares of the mix, maintaining geothermal as the primary baseload source, and progressively phasing out thermal generation to minimal back-up levels. Imports are also expected to decline as domestic renewable capacity expands. While the current mix demonstrates strong alignment with renewable ambitions, key gaps remain in solar deployment, storage integration and the full elimination of fossil-based capacity.

There are currently no concentration limits regarding the percentage of electricity supply that is controlled by one entity, but the majority of consumers in Kenya are currently supplied electricity by Kenya Power.

The principal laws governing market concentration limits include the following.

• The Energy Act empowers EPRA to review the electricity market on a regular basis, with a view to enhancing competition, improving efficiency, increasing reliability and security of supply, and improving the quality of service by all licensees.
• While the recent Energy (Electricity Market, Bulk Supply and Open Access) Regulations do not set explicit limits on market concentration, they promote competition through structural mechanisms by clearly defining a competitive electricity market framework with multiple participants across the generation, transmission, distribution and retail segments. They require non-discriminatory open access to networks, allowing new entrants to compete and reducing barriers to entry; licensees may contract with multiple suppliers, preventing dominance by a single entity. Consumer choice of supplier, transparent market operations and system operator oversight further mitigate concentration risks and support fair competition in the electricity market.
• The Competition Act (Cap. 504) establishes the Competition Authority, which is mandated to investigate any economic sector it has reason to believe may feature one or more factors relating to unwarranted concentrations of economic power. The Competition Authority may require any participant in that sector to grant it or any person authorised in writing by it access to records relating to patterns of ownership, market structure and percentages of sales.

EPRA is mandated, in consultation with CAK, to monitor trade practices in the electricity sector and promote competition. This role is supported by both sector-specific legislation and general competition law. The regulator also ensures fair competition and transparency in mechanisms such as feed-in tariff systems and broader electricity market operations.

The Energy Act and the Energy (Electricity Market, Bulk Supply and Open Access) Regulations provide the primary sector-specific framework for addressing anti-competitive behaviour. These instruments empower EPRA to review the electricity market periodically to enhance competition, improve efficiency and strengthen reliability and quality of service. EPRA is further required to monitor the trade practices of licensees and contractors, working in co-ordination with CAK to identify and address market distortions.

At the general level, the Competition Act is the principal legislation prohibiting anti-competitive conduct, including restrictive trade practices, abuse of dominance and abuse of buyer power. It establishes a comprehensive enforcement regime under CAK, which is responsible for investigating complaints, conducting market inquiries and enforcing compliance.

The Energy (Licensing) Regulations reinforce competition principles by requiring licensees to avoid undue preference or discrimination, refrain from anti-competitive arrangements, and comply with all regulatory directives aimed at preserving a level playing field across the electricity value chain.

EPRA also has significant enforcement powers under the Energy Act, including issuing binding directives, setting and approving tariffs, investigating complaints, and resolving disputes between market participants. These tools enable EPRA to address conduct that may undermine fair competition or service delivery.

Meanwhile, CAK may impose remedial measures, including financial penalties of up to 10% of annual turnover, cease-and-desist orders, or structural remedies such as divestiture where there is excessive concentration of market power.

Together, EPRA and CAK provide a dual-regulatory framework that combines sector oversight with competition law enforcement to safeguard fair competition in Kenya’s electricity market.

The Energy Act is the principal law that governs the construction and operation of generation facilities. It became effective on 8 March2019, and its main purpose was to consolidate the laws relating to energy. In addition to the Energy Act, the following would be applicable on a case-by-case basis, depending on the proposed project procurement and implementation structure and location, as well as various approvals and permits applicable to the project:

• the Civil Aviation Act (Cap. 394);
• the Competition Act (Cap. 504);
• the Community Land Act (Cap. 287);
• the Computer Misuse and Cybercrimes Act (Cap. 79C);
• the Employment Act (Cap. 226);
• the Environmental Management and Co-ordination Act (Cap. 387);
• the Income Tax Act (Cap. 470);
• the Land Act (Cap. 280);
• the National Construction Authority Act (Cap. 118);
• the Occupational Safety and Health Act (Cap. 236A);
• the Physical and Land Use Planning Act (Cap 303);
• the Public Finance Management Act (Cap. 412A);
• the Public Private Partnerships Act (Cap. 430);
• the Public Procurement and Asset Disposal Act (Cap. 412C); and
• the Scrap Metal Act (Cap. 503).

The Energy Act and associated licensing framework establish a structured process for regulating electricity generation in Kenya, particularly for projects exceeding 1 MW. Any person intending to generate electricity above this threshold must obtain a licence from EPRA; smaller self-generation projects below 1 MW for own use are exempt.

Applications must be submitted both online through the EPRA portal and in hard copy, and must include comprehensive corporate and compliance documentation, including:

• incorporation documents;
• director and shareholder details;
• tax compliance certificates;
• identification documents; and
• proof of office presence.

Applicants are also required to publish a 15-day public notice in at least two newspapers, to invite public comments and objections. They must also provide detailed technical and project documentation, such as:

• county planning approvals;
• environmental approvals from the National Environmental Management Authority (NEMA);
• proof of land rights;
• grid interconnection studies;
• feasibility studies;
• financial statements; and
• environmental and social impact assessments.

Projects must align with national energy planning frameworks.

EPRA reviews applications within defined timelines, confirming completeness within 15 days and issuing a decision within 60 days. The evaluation considers environmental, technical, financial and social factors. Overall, the framework ensures generation projects are sustainable, viable, transparent and aligned with national development objectives.

The general terms and conditions contained in an electricity generation licence under the Energy Act and related regulations cover a broad range of operational, financial and compliance obligations. These include provisions on bulk and retail tariffs, charges for electrical energy and capacity, and the determination of network use-of-system charges for transmission and distribution services. Licences also specify the term of the licence, the maximum capacity of supply and the area of operation, while requiring compliance with all applicable environmental, health and safety laws. Licensees remain subject to liability under contract and tort law, and are bound by restrictions on change of control, mergers or disposal of assets, as well as obligations relating to financial, performance and incident reporting.

Generation licensees must comply with all laws governing the development, construction and operation of power projects, and must co-ordinate with transmission or distribution licensees and the system operator for the evacuation of electricity. Under the Energy (Electricity Market, Bulk Supply and Open Access) Regulations, generation licensees are required to supply electricity in accordance with market contracts, participate in maintaining system stability and security, and engage in electricity trading within the market framework. The Regulations further impose obligations on all licensees to comply with the Grid Code, participate in ancillary services where required, and adhere to market rules, with breaches subject to sanctions including the suspension or revocation of licences. Licensees must also comply with open access principles, enabling non-discriminatory use of networks.

Notably, EPRA cannot unilaterally amend licence terms without the consent of the licensee, although licensees may apply for amendments or relaxation of conditions. In cases of force majeure, EPRA may suspend obligations where performance is prevented, subject to notification and regulatory oversight.

The Energy Act provides that a person may develop energy infrastructure on, through, over or under public, community or private land, subject to compliance with applicable laws governing land use, planning and environmental protection. This establishes the legal foundation for siting energy projects across diverse land categories.

An applicant for a generation licence must demonstrate legal rights to the project land, through either ownership or a valid long-term lease or licence. This requirement extends to distributed generation, including solar rooftop projects, where developers must secure access rights from the property owner if they do not own the underlying asset. The Act further recognises the role of the national and county governments in facilitating land acquisition, reflecting a policy commitment to enabling energy infrastructure development.

The acquisition of privately owned land is generally based on a willing buyer–willing seller or lessor–lessee arrangement, with compensation negotiated between parties based on market value and agreed commercial terms. However, the Energy Act imposes procedural requirements, including obtaining prior consent from landowners. Where a landowner cannot be traced, the developer must issue public notices and local announcements, and where necessary deposit compensation into a designated fund.

Where voluntary acquisition is unsuccessful, the Act empowers the Cabinet Secretary to initiate compulsory acquisition in accordance with the Land Act. Compulsory acquisition is defined as the State’s power as the acquisition of land for a public purpose, subject to key conditions:

• the acquisition must serve a public purpose;
• it must involve prompt and just compensation; and
• it must comply with procedural fairness, including consultation and due process.

These principles are reinforced by Article 40 of the Constitution, which protects property rights while allowing lawful acquisition for public benefit.

The Land Act provides detailed valuation principles. For freehold land, compensation is guided by a land value index, reflecting spatial land values at a given time, while disregarding artificial value increases linked to the intended project or recent speculative improvements. For leasehold land, compensation considers the remaining lease term, the value of improvements, and other costs incurred under the lease terms. The Act also allows consideration of additional criteria prescribed by regulation.

Importantly, constitutional protections extend to occupants without formal title, ensuring that individuals in good faith may receive compensation even where they lack registered ownership. This reflects a broader commitment to equitable treatment in land acquisition processes.

Further safeguards are provided under the Prevention, Protection and Assistance to Internally Displaced Persons and Affected Communities Act, which requires that displacement resulting from development projects be avoided where possible; where unavoidable, it should be justified by compelling public interest and carried out in accordance with legal standards and international obligations, including the Great Lakes Protocol.

Planning considerations are also governed by the Physical and Land Use Planning (Development Control for Strategic National Projects) Regulations, which allow for the reservation of public land for strategic projects within national or county spatial plans.

Compensation for compulsorily acquired land may take various forms, including:

• the allocation of alternative land of equivalent value;
• a monetary payment, either lump sum or instalments;
• the issuance of government bonds;
• the grant of development rights;
• the allocation of equity shares in public entities; or
• any other lawful compensation mechanism.

For projects on community land, the Community Land Act requires a formal agreement between the investor and the community, negotiated through a free, prior and informed consultation process. Such agreements must address environmental, social, cultural and economic impacts, provide for compensation and benefit-sharing, and include obligations for land rehabilitation. Importantly, these agreements must be approved by at least two-thirds of adult community members at a duly constituted assembly, ensuring meaningful community participation and consent.

Overall, Kenya’s legal framework seeks to balance investment facilitation with property rights protection, community participation and fair compensation, ensuring that energy infrastructure development proceeds in a lawful, transparent and socially responsible manner.

The Energy Act requires the removal of all infrastructure and the rehabilitation of the land, and all decommissioning activities must meet any good practices that may be prescribed by the Cabinet Secretary in regulations. The Form of Licence under the Energy (Licensing) Regulations require a licensee to obtain prior written approval from EPRA before disposing of any of its assets. This requirement may be waived if EPRA has issued a directive granting a general consent for the disposal of the assets of a specified description or below a specified value and, prior to the disposal, the licensee has provided EPRA with evidence that the asset or part of the undertaking to be disposed of falls within the provisions of such directive or if the disposal is for operational purposes in the ordinary course of business.

Where energy infrastructure is removed, the surface of the land should be restored to its former condition as far as possible by the licensee; failure to do so may result in the restoration being carried out by the owner of the land, with costs recoverable from the licensee. The Energy (Draft Abandonment and Decommissioning) Regulations are expected to provide further guidance on decommissioning generation facilities.

NEMA may issue an environmental restoration order requiring the person on whom it is served to restore the environment as near as it may be to the state in which it was before the taking of the action that is the subject of the order. Any person who fails or refuses to comply with an environmental restoration order commits an offence and is liable to imprisonment or a fine.

The Scrap Metal Act (Cap. 503) includes a framework for the disposal of critical national infrastructure, including physical and virtual assets or facilities related to electricity generation, transmission and distribution.

The state entity responsible for the critical national infrastructure is required to dispose of scrap metal from critical national infrastructure to the Numerical Machining complex and the Kenya Shipyard Limited for smelting into billets. Where there is inadequate capacity at either of these facilities, the state entity is required to seek approval to partner with a local smelter.

All laws and legislation referred to in 3.1 Constructing and Operating Generation Facilities are applicable to the construction and operation of transmission facilities, alongside the Kenya National Transmission Grid Code.

Environment reviews are required, as discussed in 3.2 Obtaining Approvals to Construct and Operate Generation Facilities.

The licence application and approval process is similar to that described for generation facilities in 3.2 Obtaining Approvals to Construct and Operate Generation Facilities.

The public participation obligations for generation projects are applicable to power transmission projects.

In addition to the general terms and conditions outlined in 3.3 Approvals to Construct and Operate Generation Facilities, a transmission licensee is required to ensure the efficient, reliable and co-ordinated operation of the national transmission system. This includes building, maintaining and expanding infrastructure to meet demand and provide adequate capacity for all authorised users. The licensee must operate the system in co-ordination with interconnected transmission and distribution networks, and must comply fully with the directions of the system operator.

A key obligation is to provide non-discriminatory open access to the transmission network for all licensees and eligible consumers, subject to the payment of fair and approved wheeling or transmission charges. The licensee must also supply relevant information to EPRA, to enable the approval of such tariffs. In addition, the transmission system must be operated and maintained to ensure safe, reliable and economic electricity transmission, including timely repairs and system upgrades where necessary.

Under the Energy (Electricity Market, Bulk Supply and Open Access) Regulations, transmission licensees are further required to facilitate the wheeling of bulk electrical energy and to support overall system stability and market operations, reinforcing their central role in enabling a competitive and efficient electricity market.

The process is generally similar to that described for generation facilities (see 3.4 Eminent Domain, Condemnation and Expropriation Rights to Construct and Operate Generation Facilities).

In recognition of the fact that transmission projects often require infrastructure to traverse across multiple parcels of land, transmission licensees are required to secure rights of way through easements, which grant legal access and usage rights over land strictly for constructing, operating, maintaining and repairing transmission facilities. These easements do not transfer ownership; the landowner retains title, subject to restrictions on activities that may interfere with the transmission system.

Where transmission lines cross forest land, the process is governed by the Forest Conservation and Management Act (Cap. 385). Forests in Kenya are categorised as public, community or private, and the requirements for securing rights of way differ accordingly. Public forests are managed by the Kenya Forest Service (KFS) and require a formal application detailing the purpose, location, size, duration and environmental mitigation measures of the proposed project. Upon approval, KFS may issue an easement or wayleave under Section 56, specifying conditions such as conservation obligations and access limits.

For community forests, developers must obtain prior consent from the relevant community or its representatives. Across all forest categories, compliance with environmental laws is mandatory. In particular, public participation is required during the EIA process, ensuring that affected stakeholders are consulted. These requirements reflect Kenya’s broader legal framework, which prioritises environmental protection, sustainable land use and stakeholder engagement in energy infrastructure development.

A transmission licensee has exclusive rights to construct and operate transmission facilities within a specified geographical territory, subject to the provision of non-discriminatory open access to any licensee or eligible consumer upon the payment of fair and reasonable transmission or wheeling charges.

The exclusive rights are provided for in the transmission licence issued by EPRA, which provides for a specified geographical area of operation. However, the exclusive right is subject to the transmission licensee providing non-discriminatory open access to its transmission system for use by any licensee or eligible consumer upon the payment of fair and reasonable transmission or wheeling charges.

Transmission charges and terms of service in Kenya are established through a regulated framework under the Energy Act and the Energy (Electricity Market, Bulk Supply and Open Access) Regulations, with strong oversight by EPRA.

Under the Energy Act, all contracts for bulk supply and network services, including transmission arrangements, must be approved by EPRA before execution to ensure that tariffs and charges are just, reasonable and cost-reflective. The Act further empowers EPRA to set, review and adjust electricity tariffs and tariff structures, and specifically requires licences to include provisions for determining charges for use of transmission and distribution networks. Transmission tariffs (wheeling charges) are therefore subject to regulatory approval and ongoing review.

The Electricity Market Regulations complement this framework by requiring bulk supply tariffs and network service tariffs to be approved by EPRA and applied in accordance with market rules. They also mandate non-discriminatory open access to transmission networks, meaning that charges must be applied fairly to all users and not create barriers to entry.

Transmission terms of service are further governed by:

• standardised contracts (eg, wheeling agreements and bulk supply agreements) subject to EPRA approval;
• compliance with the Grid Code, which sets technical and operational standards for system access and reliability; and
• oversight by the system operator, which ensures efficient dispatch, congestion management and system stability.

In addition, licensees are required to maintain data on the quality and reliability of supply, which informs regulatory review of service standards.

Overall, transmission charges and service terms are centrally regulated, contract-based and subject to transparency, non-discrimination and periodic regulatory oversight, to ensure efficiency, fairness and system reliability.

The Energy Act defines open access as the non-discriminatory use of transmission or distribution systems by any licensee or eligible consumer, subject to the payment of fair and reasonable charges. It imposes a duty on transmission licensees to grant such access on transparent terms, thereby promoting competition and efficient utilisation of network infrastructure.

Open access in the transmission segment is governed primarily by Section 136 of the Energy Act and the Energy (Electricity Market, Bulk Supply and Open Access) Regulations. EPRA is responsible for regulating this framework, including approving wheeling charges, contractual arrangements and access conditions. All access agreements, particularly wheeling agreements, must be submitted to EPRA for approval, to ensure fairness, cost-reflectivity and compliance with regulatory standards.

Under the 2026 Regulations, a licensee or eligible consumer seeking access must submit a formal application to the transmission licensee, who then conducts a technical assessment within 30 days and submits its findings to the system operator for a “no-objection”. Following this, a determination must be made within 45 days, after which the parties may negotiate a wheeling agreement. The agreement must then be approved by EPRA within 60 days before taking effect.

The system operator, designated under the Energy Act, plays a critical role in ensuring system stability, dispatch co-ordination and congestion management, while remaining independent of electricity trading activities.

Open access is subject to conditions including sufficient network capacity, compliance with the Grid Code and the payment of wheeling charges. The Regulations also set a minimum load threshold of 10 MVA for transmission-level access and allow operational controls such as load curtailment during maintenance. Overall, the framework promotes market access while safeguarding reliability and operational integrity.

All the laws governing the construction and operation of electricity generation and transmission segments apply to distribution (see 4.1 Constructing and Operating Transmission Lines and Associated Facilities), together with the Kenya National Distribution Grid Code.

The approval process and timelines are similar to those described for generation and transmission facilities (see 4.2 Obtaining Approvals to Construct and Operate Transmission Lines and Associated Facilities).

In addition to the general terms and conditions, specific conditions that need to be adhered to by a distribution licensee include:

• building, maintaining and keeping in a good state of repair suitable and sufficient electric supply lines for purposes of enabling supply to be given in the area of supply specified in the licence;
• operating an efficient, safe, co-ordinated and economical distribution system;
• where applicable, complying with the directions of the system operator;
• providing non-discriminatory open access to its distribution system for use by any licensee, retailer or eligible consumer upon:
1. the payment of use-of-system charges; and
2. compliance with such minimum requirements of the distribution licensee; and
• ensuring as far as technically and economically practicable that the distribution system is operated with enough capacity (and, if necessary, augmented or extended to provide enough capacity) to provide network services to persons authorised to connect to the network.

Under the Energy (Reliability and Quality of Electrical Energy Supply and Service) Regulations, 2021, distribution licensees must maintain high reliability standards, ensuring that outages are limited in frequency and duration, while the Energy (Electricity Market, Bulk Supply and Open Access) Regulations further require distribution licensees to facilitate the efficient, reliable and safe wheeling of electricity within the market framework.

The process for amendments or the relaxation of licence terms is similar to that described for generation facilities.

The provisions relating to transmission facilities are applicable to distribution facilities (see 4.4 Eminent Domain, Condemnation and Expropriation Rights to Construct and Operate Transmission Lines and Associated Facilities).

Like transmission licensees, a distribution licensee has exclusive monopoly rights to provide distribution services within a specified geographical territory, subject to the rights of eligible consumers, who are entitled to choose any licensee to be their supplier of electrical energy for their own use upon the payment of use-of-system charges. The Energy (Electricity Market, Bulk Supply and Open Access) Regulations provide that, for grant of open access, the load shall not be less than 1 MVA in the distribution system.

The Energy Act contemplates that the distribution system within a licensee’s licensed area may consist of the electric supply lines planned and built by REREC or the relevant county government, in addition to those planned and built by the licensee.

The Energy (Net Metering) Regulations, 2024 provide a framework for consumers generating through renewable energy technologies with an installed capacity of less than 1 MW, to supply electricity to the grid in times of over-production and to make use of the credited energy during other times.

The process for establishing distribution system charges and terms of service broadly mirrors that of the transmission sector, but is further detailed under both the Energy Act and the Electricity Market Regulations.

Under the Energy Act, all electricity supply and bulk supply contracts must incorporate tariffs that are approved by EPRA, ensuring that charges for distribution services remain just and reasonable, and reflect efficient costs and prudent investment. Similarly, use-of-system charges for access to distribution networks must be fair and non-discriminatory, supporting open access for other licensees and eligible consumers.

The Electricity Market Regulations reinforce this framework by requiring that bulk supply and network service tariffs be approved by EPRA, and that distribution licensees provide non-discriminatory open access to their systems. The regulations also require distribution licensees to facilitate the efficient, reliable and safe wheeling of electricity, and comply with market rules governing pricing, energy accounting and system use.

In relation to quality of service, the Energy (Reliability and Quality of Electrical Energy Supply and Service) Regulations require licensees to maintain reliability standards and submit periodic reports to EPRA. The Distribution Grid Code further sets technical and operational standards for planning, connection and system performance.

Overall, distribution charges and service terms are determined through regulated contracts, EPRA oversight and market rules, ensuring transparency, cost-reflectivity and system reliability.

Retail tariffs are published by EPRA, with the most recent being the KPLC Retail Electricity Tariff Review for the 2022/23 – 2025/26 4th Tariff Control Period, effective 1 April 2023. In March 2026, KPLC applied for a Retail Electricity Tariff Review, but the Ministry of Energy and Petroleum withdrew the application as it proposed an increase in tariff for domestic and industrial consumers.

The Energy Act entitles persons aggrieved by a decision of EPRA to appeal to the Energy and Petroleum Tribunal within 60 days of the decision. A further right of appeal to the High Court against a decision of the Tribunal is available within 30 days of the Tribunal’s decision. In addition, all distribution and retail licensees are required to have grievance and complaint-handling procedures in place that are accessible to consumers.