Workshop VI: Regulatory framework for financing, pricing & procurement of energy projects in Kenya

The Energy Act 2019 opened all segments of the electricity market—generation, transmission, distribution, and off-grid—to private sector participation, liberalising the industry and increasing potential competition.

In 2021, the Public Private Partnership Act established a framework for private involvement in financing, building, and operating infrastructure and services.

The 2024 Regulations further structured the market into a wholesale segment (generation and bulk supply) and a retail segment (supply to consumers), while defining key roles such as generation, transmission, and distribution licensees, and eligible consumers. They also reinforced tariff regulation as a central function of the regulator, EPRA.

On 13 November 2025, Kenya’s National Assembly adopted the Addendum Report on reducing electricity costs, lifting the moratorium on power purchase agreements (PPAs). This introduces a shift toward competitive auctions, modelled on South Africa’s IPP Procurement Programme.

For developers, lenders, and consumers, this signals the reopening of a previously stalled project pipeline amid rising demand and tightening reserve margins.

However, the framework is still evolving. The auction system depends on the upcoming Renewable Energy Auctions Policy (REAP), which will also include competitive procurement for Battery Energy Storage Systems (BESS) and introduce BESS PPAs. EPRA is expected to publish indicative tariffs and new PPA terms.

This session will explore the evolving regulatory landscape, share lessons from other renewable energy markets, and assess current developments.