The World Bank has raised concerns over transparency and potential conflicts of interest in Kenya’s power purchase agreements, saying weaknesses in the way some electricity deals were approved and managed have contributed to high power costs.
In its November 2026 Kenya Economic Update, the lender said investigations into power purchase agreements (PPAs) had identified concerns involving public officials who were later employed by, or held ownership interests in, companies involved in electricity generation.
The report said the limited transparency surrounding some agreements raised questions about how public interest was protected during negotiations and approvals. It also noted that amendments to certain contracts had favoured providers without public disclosure or clear explanations.
Some thermal power agreements have attracted scrutiny because of the high cost of electricity generated by these plants. The report said contract terms, including guaranteed capacity charges and take-or-pay clauses, can create significant payment obligations for power purchasers.
Concerns have also been raised over renewable energy projects that were contracted without competitive processes and despite not being included in Kenya’s Least Cost Power Development Plan. The World Bank said some negotiated prices were high compared with similar projects in countries that used competitive auctions.
The report linked governance problems in the power sector to higher contract costs and technical challenges, including transmission losses and delays in completing new transmission lines needed to connect generation capacity.
It also cited concerns raised in audits and investigations by public oversight institutions. A Presidential Task Force on PPAs examined high electricity prices between 2021 and 2023 and recommended a forensic audit of independent power producers. A parliamentary inquiry followed in 2025.
The World Bank said these governance concerns have direct consequences for businesses and households because electricity costs affect production expenses and the price of goods and services.
The lender recommended more competitive and transparent procurement in the energy sector, alongside greater disclosure and accountability in power agreements. It also identified transparency around PPAs as one of the areas where governance reforms could reduce costs and improve the business environment.
The report’s findings place scrutiny of electricity contracts among the wider reforms needed to make power more affordable and support investment in Kenya’s manufacturing and other productive sectors.
