Previously, Kenya Power acted as the sole intermediary, purchasing electricity from producers and distributing it to all consumers. The new structure allows for a transition to a competitive commodity-based market in which participants can conduct direct transactions.
The central element of these reforms is consumer choice. Eventually, electricity consumers will have the freedom to choose their preferred supplier, which will facilitate competition based on prices and quality of services. Although the transition will start with large users, it lays the foundation for broader market access. Under the new wholesale supply agreements, large consumers such as industrial parks, factories, and shopping malls with a demand of at least one megavolt—ampere in distribution networks or ten megavolt-ampere in transmission lines can now purchase electricity directly from generators. This removes Kenya Power from the role of an intermediary when concluding expensive contracts and allows companies to diversify their energy sources by entering into agreements with multiple suppliers.
The introduction of «open access» is perhaps the most significant reform. This policy stipulates that all transmission and distribution infrastructure should be accessible to qualified participants on a non-discriminatory basis. Grid owners now have to transfer electricity to third parties for a fee, effectively separating infrastructure management from supply operations. This prevents the owners of the power grid from defending their commercial interests and deprives Kenya Power of exclusive control over electricity distribution.
To ensure market transparency, the new system provides for structured trading mechanisms, including bilateral agreements, spot markets, and forward contracts. Supervision will be carried out by a designated system operator responsible for managing the network, matching supply and demand, and settling transactions, ensuring that operational control is independent of commercial interests.
Finally, the reforms will facilitate cross-border electricity trade through regional initiatives such as the East African Energy Pool. By allowing the import and export of electricity, regulations introduce regional competition, requiring local suppliers to remain competitive with international producers.
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