Kenya Accelerates Renewable Energy Growth Amid Oil Development

Kenya is making significant strides in its renewable energy sector while developing its oil production capabilities. The government’s recent initiatives, including the launch of a national energy plan, aim to diversify the country’s energy mix, enhancing energy security. This dual approach focuses on ramping up renewable projects while also advancing the nascent oil industry.

The U.K. oil and gas firm Tullow Oil is at the forefront of this oil venture, having faced challenges in securing investment for the South Lokichar oilfield. After TotalEnergies and Africa Oil withdrew from the project two years ago, Tullow is now independently seeking financing to develop a pipeline that will enable crude transport from the landlocked northern region. Earlier this year, Tullow signed a terms agreement with Gulf Energy Ltd for at least $120 million, and it is anticipated that crude exports will commence in 2024. The South Lokichar project is projected to produce between 60,000 and 100,000 barrels per day (bpd), with an estimated 560 million barrels recoverable over a span of 25 years.

As the oil sector develops, the Kenyan government is also preparing to launch an oil and gas auction for 10 blocks in September. Despite this progress, the oil industry remains in its infancy, prompting ongoing investment in renewable energy sources to strengthen energy security. In 2018, Kenya set a goal of achieving universal electricity access by 2020, which has since been extended to 2030. According to the International Energy Agency (IEA), the country is on track to meet this objective, with electricity access rising from 37 percent in 2013 to 79 percent in 2023. Urban areas have achieved full access, largely due to the government’s Last Mile Connectivity Project, which aims to connect an additional 280,000 households by the end of the year.

Off-grid solar power projects have played a crucial role in expanding electricity access, particularly in rural areas. In 2023, Kenya accounted for nearly three-quarters of all solar home system sales in East Africa, as reported by the IEA. It is estimated that one in five Kenyan households now utilizes solar-powered mini-grids or standalone systems.

“Kenya is showing how the strategic deployment of clean energy technologies and electrification in end-use sectors can significantly improve the lives of millions of the most vulnerable people in the world,”

stated Mary Burce Warlick, Deputy Executive Director of the IEA.

The Kenyan government has also recently launched a National Energy Policy, developed with input from the IEA and other stakeholders. The Draft National Energy Policy (NEP) 2025-2034 incorporates recommendations from the IEA Energy Policy Review. Currently, renewable energy sources, including geothermal, hydro, wind, and solar, account for nearly 90 percent of the country’s power generation, a significant increase from 50 percent in 2000. Kenya is home to the Lake Turkana Wind Project, the largest wind farm on the African continent, while geothermal energy contributes approximately one-third of the country’s electricity generation capacity.

Despite these advancements, one major challenge remains: the continued reliance on polluting fuels such as firewood, charcoal, and kerosene by millions of households, primarily in rural areas. The government aims to address this issue through the rollout of its Kenya National Cooking Transition Strategy, which seeks to achieve universal access to clean cooking by 2028.

To further modernize its energy infrastructure, Kenya plans to enhance and expand its electricity grid. New regulations set to be introduced in 2024 will open transmission and distribution networks to private investment, fostering competition, reducing costs, and improving efficiency. In 2023, approximately 23 percent of power was lost in Kenya’s transmission network due to technical issues, theft, and billing problems. The implementation of smart grids and improved management systems is expected to mitigate these losses moving forward.

In March, Kenya announced two new 40 MW solar projects in the southern region of the country. This follows the French Development Agency’s announcement in August 2024 regarding funding for a solar plant located around 100 km northeast of Nairobi. According to the International Renewable Energy Agency, Kenya had 358 MW of solar power capacity by the end of 2023.

In July, a financing deal worth $156 million was secured by commercial banks, including British International Investment, Norfund from Norway, and the Dutch development bank FMO, for off-grid solar power initiatives. This investment is anticipated to facilitate the sale of around 1.4 million solar home systems in rural areas across the country.

“What makes this work is that we collect small, steady, and predictable payments from millions of customers,”

explained Anish Thakkar, co-founder of Sun King.

As Kenya continues to balance its ambitions in both renewable energy and oil production, the government’s commitment to expanding clean energy access remains a pivotal aspect of its overall strategy for energy security and economic development.