NAIROBI, Kenya, July 22 – Kenya’s decision to freeze new Power Purchase Agreements (PPAs) between 2018 and 2025 significantly slowed investment in utility-scale renewable energy projects, according to a new BloombergNEF report.
While the moratorium helped halt non-competitive bilateral power deals signed at high prices, it also delayed investment by new independent power producers (IPPs) at a time when the country’s electricity reserve margins were tightening.
As of 2025, Kenya had an installed electricity generation capacity of 3.8GW, with renewable energy sources including geothermal, hydropower, solar and onshore wind accounting for more than 80 percent of installed capacity and over 90 percent of electricity generation.
“Power demand is rising quickly, with Kenya’s 2023 Energy Transition and Investment Plan estimating that installed capacity needs to hit 9GW by 2030 to support post-pandemic economic and industrial growth,” the report said.
“This requires nearly 1GW of annual additions, as utility-scale investment stalled due to a government freeze on new power purchase agreements in place from 2018 to late 2025.”
The report notes that the government has since lifted the freeze and is transitioning to competitive renewable energy auctions, with the first auction expected before early 2027.
It says solar power and battery energy storage are likely to present the earliest investment opportunities once procurement resumes, while wind power is expected to remain competitive due to Kenya’s abundant wind resources.
Despite the slowdown in utility-scale renewable energy projects, BloombergNEF identifies Kenya as one of sub-Saharan Africa’s fastest-growing clean energy markets, driven largely by strong demand for small-scale solar systems.
“Of the region’s five largest clean energy technology importers since 2025 – South Africa, Nigeria, Democratic Republic of the Congo (DRC), Zambia and Kenya – only South Africa, DRC and Zambia have meaningful utility-scale project pipeline. Nigeria and Kenya are currently driven by small-scale demand, though Kenya’s utility-scale investment could recover if government auction plans progress,” the report said.
