KENYA Law and Practice Contributed by: Mary Waithiegeni Chege, Mary Anne Wachira and Joy Odhiambo, EMSI & Asssociates
EMSI & Associates 4th Floor, Sanlam Tower Waiyaki Way P O BOX 1791-00600 Westlands Nairobi Kenya
Tel: +254 780 944 410 Email: info@emsi.co.ke Web: www.emsi.co.ke
1. Structure and Ownership of the Power Industry 1.1 Law Governing the Structure and Ownership of the Power Industry 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 struc- ture 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 govern- ments in accordance with the Constitution of Kenya 2010. The generation of electricity in Kenya is dominated by the majority state-owned Kenya Electricity Gen- erating 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-volt- age 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, includ- ing 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 his- torically served as the retailer and system operator, in addition to owning and operating part of the transmis- sion 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) mar- ket remains at an early implementation stage, despite strong policy backing to support renewable integra- tion and grid stability. KenGen is leading deployment as the implementing agency for the World Bank‑fund- ed 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 commis- sioned 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, Ken- ya is transitioning from pilot deployment to its first utility-scale BESS installations. 1.2 Principal State-Owned or Investor-Owned Entities The principal state-owned players in the generation, transmission and distribution segments include the following.
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