The decision, approved by Parliament on November 12, 2025, is expected to unlock stalled energy projects, reduce power outages, and stabilize tariffs, enhancing the country’s competitiveness for local and international investors.
“The lifting of the moratorium on Power Purchase Agreements marks a significant shift in Kenya’s energy landscape,” Kinyanjui said in a post on X.
“For years, high electricity costs and frequent outages have been major concerns for businesses and investors.”
The moratorium, first imposed in 2018, halted Kenya Power from entering into new agreements with independent power producers.
The moratorium, first imposed in 2018, halted Kenya Power from entering into new agreements with independent power producers.
The freeze aimed to review costly deals, which had slowed the expansion of local generation capacity, increased reliance on electricity imports from Ethiopia and Uganda, and contributed to recurrent power rationing.
Lawmakers voted by acclamation to adopt the Energy Committee’s recommendation to lift the freeze, introducing stricter terms for upcoming contracts.
Lawmakers voted by acclamation to adopt the Energy Committee’s recommendation to lift the freeze, introducing stricter terms for upcoming contracts.
Under the new framework, the wholesale price of electricity is capped at $0.07 (Sh9.04) per kilowatt-hour (kWh), and agreements can be priced in either Kenyan shillings or U.S. dollars.
“As leaders, we have a responsibility to adopt this addendum,” said Majority Leader Kimani Ichung’wah.
“As leaders, we have a responsibility to adopt this addendum,” said Majority Leader Kimani Ichung’wah.
“As promised to the private sector, we are now addressing the matter.”
Kenya’s electricity demand has surged in recent years, rising by 243 megawatts between 2022 and August 2025, while local production grew marginally during the PPA freeze.
Kenya’s electricity demand has surged in recent years, rising by 243 megawatts between 2022 and August 2025, while local production grew marginally during the PPA freeze.
Despite this, the share of imported electricity increased to 10.6 percent (1.53 billion kWh) in the year ending June 2025, up from 4.87 percent in 2024 and just one percent in 2021.
Frequent power cuts, especially between 5 pm and 10 pm in some regions, have highlighted the urgency of the policy shift.
The moratorium’s lifting is expected to enable the commissioning of new power plants, expand generation capacity, and reduce Kenya’s reliance on imported electricity, thereby ensuring more consistent supply for households and businesses.
Kinyanjui emphasized that the move will significantly improve Kenya’s investment climate by providing affordable, reliable electricity — a critical factor for industrial growth and competitiveness.
The moratorium’s lifting is expected to enable the commissioning of new power plants, expand generation capacity, and reduce Kenya’s reliance on imported electricity, thereby ensuring more consistent supply for households and businesses.
Kinyanjui emphasized that the move will significantly improve Kenya’s investment climate by providing affordable, reliable electricity — a critical factor for industrial growth and competitiveness.
With wholesale prices now regulated and new projects allowed under stricter contractual terms, investors can plan expansions with more certainty and confidence.
“With wholesale prices now at $0.07 per kWh, the move is expected to boost generation capacity, reduce outages, and stabilize tariffs — a welcome development for businesses and Kenya’s investment competitiveness,” Kinyanjui noted.
The government has signaled that the new framework balances the need for investor confidence with consumer protection, ensuring tariffs remain reasonable while encouraging private sector participation in the energy sector.
The lifting of the moratorium marks the beginning of a new era for Kenya’s energy sector. Stakeholders now anticipate a surge in renewable energy projects, enhanced public-private partnerships, and improved energy security.
“With wholesale prices now at $0.07 per kWh, the move is expected to boost generation capacity, reduce outages, and stabilize tariffs — a welcome development for businesses and Kenya’s investment competitiveness,” Kinyanjui noted.
The government has signaled that the new framework balances the need for investor confidence with consumer protection, ensuring tariffs remain reasonable while encouraging private sector participation in the energy sector.
The lifting of the moratorium marks the beginning of a new era for Kenya’s energy sector. Stakeholders now anticipate a surge in renewable energy projects, enhanced public-private partnerships, and improved energy security.
0 Comments