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Kenya’s new National Energy Compact 2025–2030 has set out a bold agenda for the country’s energy future — targeting 100 per cent clean power, universal access to electricity, and a transition to an economy powered by renewable energy.
However, while the plan appears ambitious on paper, many experts believe its financial and structural foundations remain shaky.
According to the draft released by the Ministry of Energy and Petroleum in July 2025, the Kenyan government hopes to mobilise about US$18.7 billion (approximately KSh2.5 trillion) over the next five years to fund its energy programmes. The plan expects US$7.9 billion to come from private investors and US$10.8 billion from public sources.
At the centre of this financing framework is a proposed Consolidated Energy Fund, which aims to pool resources for projects in power generation, transmission, renewable innovation, and energy research.
Despite being highlighted as a key pillar of the new Compact, the Consolidated Energy Fund remains largely a concept on paper. The document only commits to “operationalise the Consolidated Energy Fund by 2026/2027” without providing details about its seed capital or revenue sources.
Analysts say the proposal risks becoming another underfunded initiative within Kenya’s already crowded landscape of special-purpose funds.
The country currently operates several funds in the energy and environmental sectors, including the Petroleum Development Fund, the Rural Electrification and Renewable Energy Fund, and the Climate Change Fund. Many of these have struggled with weak coordination, limited oversight, and accountability issues.
Past experience shows that even well-intentioned funds can be derailed by mismanagement. The Petroleum Development Fund, for example, has faced repeated audit queries over non-transparent transactions, leading to concerns that the proposed energy fund might fall into similar problems if governance structures are not clearly defined.
Under the new Compact, Kenya aims to connect an additional 5.1 million households to electricity and expand its power transmission network by about 8,000 kilometres. The plan also seeks to double renewable energy generation capacity and achieve a 100 per cent clean energy grid by 2030.
Another major target is reducing reliance on traditional biomass cooking. The government plans to transition 65 per cent of households to cleaner cooking fuels such as liquefied petroleum gas (LPG) and electric stoves.
But these targets may be difficult to achieve under the current financial projections. Private capital inflow into Kenya’s energy sector has remained relatively flat, averaging about US$2 billion over the last five years — far below the pace required to meet the Compact’s goals.
“The private sector’s participation is critical,” one industry analyst noted, “but Kenya’s investment environment still faces challenges such as delayed payments, regulatory uncertainty, and currency depreciation.”
Beyond financing, the Compact faces a major implementation hurdle. It requires close coordination among multiple government agencies — including the Kenya Power and Lighting Company (KPLC), KenGen, Kenya Electricity Transmission Company (KETRACO), Geothermal Development Company (GDC), Rural Electrification and Renewable Energy Corporation (REREC), and various county governments.
Each of these institutions operates under separate mandates and has long-standing operational inefficiencies. Transmission projects continue to suffer delays, while power losses, network congestion, and outdated infrastructure remain persistent problems.
The Compact proposes creating a County Energy Planning Framework to improve collaboration, but without a clear funding mechanism or enforcement structure, it risks remaining a policy statement rather than a practical tool.
Despite its shortcomings, the National Energy Compact aligns closely with Kenya Vision 2030, the Sustainable Development Goals, and Africa’s broader clean energy transition agenda.
Kenya already ranks among global leaders in renewable power, sourcing about 83 per cent of its electricity from renewable sources such as geothermal, hydro, wind, and solar. The push to achieve a fully clean energy grid would further cement Kenya’s status as a model for sustainable development in Africa.
However, experts warn that without firm financing structures, improved governance, and private sector confidence, the vision may remain aspirational.
“The Compact shows Kenya’s commitment to clean energy,” said an energy economist in Nairobi. “But for it to succeed, the government must turn the numbers into action — ensuring funds are available, coordination is strong, and implementation timelines are realistic.”
