Kenya is preparing to establish a Consolidated Energy Fund that will likely add new charges to fuel and electricity bills.
Energy Cabinet Secretary Opiyo Wandayi confirmed that contributions from energy sector players will help finance the fund, which translates to consumers paying more at the pump or on their power bills.
According to Business Daily, the government plans to use the CEF to finance transmission lines, hydropower dams, renewable energy projects, research, and human capacity development.
Parliament will provide an initial KES 500 million to get things started, with additional funding coming from government securities, assets recovered from energy sector crimes, and fines levied by the Energy and Petroleum Regulatory Authority.
This move comes as Kenya’s government struggles with limited fiscal space and rising debt levels, making it harder to fund energy projects through traditional loans, grants, and taxes.
The administration has already shifted toward Public Private Partnerships for some projects, and the CEF represents another financing alternative.
Kenyans already pay multiple levies on fuel and electricity. The Roads Maintenance Levy takes KES 25 per litre of petrol and diesel. The Petroleum Development Levy adds KES 5.40 per litre on diesel and petrol, and KES 0.40 per litre on kerosene.
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Electricity consumers pay a Rural Electrification Authority Levy equal to 5% of their power consumption, which funds electrification in rural areas.
The Energy Ministry has identified the CEF as a priority reform in its 2025-2029 strategic plan. The ministry’s petroleum policy for the same period describes plans for a petroleum consolidated fund to handle decommissioning of petroleum infrastructure, common user facilities, education, and health services in the sector.
No specific rate for the new levy has been announced, and it remains unclear whether it will apply to fuel, electricity, or both. What’s certain is that consumers who already shoulder several energy-related charges will face additional costs once the fund becomes operational.
