For decades, if you wanted to buy electricity in Kenya, you bought it from Kenya Power. That’s over now.
The government has gazetted the Energy (Electricity Market, Bulk Supply, and Open Access) Regulations of 2026, which allow power producers to sell electricity directly to large consumers, bypassing Kenya Power entirely. The regulations were published on May 8.
The rules target big users: factories, industries, and large commercial operations. Specifically, any consumer drawing at least 1 megavolt-ampere (MVA) from the distribution network or 10MVA from the transmission network qualifies.
READ: KPLC Debt Pushes KenGen to Consider Direct Power Sales to Customers
To put 10MVA in context, that’s the kind of load drawn by a large manufacturing facility or a densely populated mixed-use development.
The mechanics work through a system called wheeling. Producers who don’t have existing power purchase agreements with Kenya Power can apply to use Kenya Power’s and KETRACO’s transmission and distribution infrastructure to reach these consumers directly, paying a fee for that access.
The Energy and Petroleum Regulatory Authority (EPRA) will approve the pricing for these direct sales, and contracts will run between one and ten years, as per a Business Daily report.
This is important because large consumers are Kenya Power’s financial backbone. Industries, factories, and businesses bought 7,313 gigawatt-hours of electricity in the year ended June 2025, which was 70% of the 10,570GWh Kenya Power sold that year.
These customers pay more per unit than domestic users because of demand charges tied to high-capacity infrastructure, and Kenya Power has used that premium to cross-subsidize cheaper rates for households.
KenGen, which supplies 59% of all electricity Kenya Power purchases, has been pushing for exactly this kind of reform for years.
The company openly told investors in February that direct consumer sales were part of its strategy to reduce the risk of relying on Kenya Power as its sole buyer. It was simply waiting for the regulations. Now they’re here.
The World Bank had cautioned against this move, warning that once large consumers start migrating to alternative suppliers, Kenya Power loses the revenue it uses to keep domestic tariffs down. Household electricity prices could rise as a result. The government proceeded anyway.
Kenya Power also carries long-term wholesale contracts with generators, including KenGen, Lake Turkana Wind, and OrPower4. Those obligations don’t disappear if their biggest customers walk out the door, which is the core of the financial risk the World Bank flagged.
For the large consumers, the appeal is simple. They have spent years dealing with blackouts, unstable supply, and high bills, pushing many of them to install backup solar or biomass systems. Direct access to producers gives them a real alternative rather than a workaround.
Whether domestic consumers end up paying more will depend on how fast the migration happens and how EPRA manages tariff adjustments. That is the part worth watching.
