By Pascal Ndegwa - Reporter
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Kenya, November 04, 2026 - Kenyan businesses pay some of the region’s highest electricity prices, and a new World Bank report says weak governance may be part of the reason. Businesses in Kenya pay 17.5 US cents per kilowatt-hour, more than double Vietnam’s 7.8 cents and close to 50% more than Uganda’s 11.8 cents.
The figures come from the World Bank’s Kenya Economic Update, Edition No. 34, published in November 2026. The report uses data from GlobalPetrolPrices and compares business electricity prices in Kenya, Vietnam, Morocco, South Africa, and Uganda. Kenya’s business rate is also higher than Morocco’s 10.9 cents and South Africa’s 10 cents.
The report says high-cost power purchase agreements, known as PPAs, may have helped push prices up. A PPA is a long-term contract in which Kenya buys electricity from a private power producer. Some contracts include “take-or-pay” clauses. That means Kenya may have to pay for power even if it does not need or use all of it.
The report says early PPAs were signed during droughts, when hydropower was low. Some cost increases were unavoidable. But it also says Kenya did not always use competitive bidding. A 2021 report cited by the World Bank found that only 24% of 42 PPAs signed by Kenya Power were known to have gone through a competitive process.
The report also raises concerns about conflicts of interest. It says some public officials who approved power projects later worked for, or owned, companies in the same sector. It adds that the true owners of some IPPs were not clearly disclosed. These are allegations and governance concerns, not proven criminal convictions.
Kenya’s power system also loses a lot of electricity before it reaches customers. The report says transmission and distribution losses were above 23%, higher than EPRA’s target of 16.5%. Some losses come from old or weak infrastructure and fast expansion to rural areas. The report also links some losses to theft and billing problems.
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For a manufacturer, high power costs are not just numbers on a bill. Imagine a small factory in Nairobi that makes juice. If electricity costs rise, the owner may raise prices, reduce production, delay hiring, or use a generator. That can make Kenyan goods more expensive than goods from countries with cheaper power.
The World Bank modelled what could happen if electricity costs fell by 10% from 2026. It estimates that Kenya’s GDP could rise by about 0.27%, private investment by 0.33%, and the real wage bill by 0.29%. These are model estimates, not guarantees. The full model documents would be needed to check every assumption.
Still, the price comparison alone does not prove corruption. Vietnam, Uganda, and Kenya have different power systems, taxes, subsidies, exchange rates, and customer groups. A fair comparison would need the same type of business customer, the same period, and a clear breakdown of all charges.
The report’s main point is that cheaper, cleaner power deals could help Kenya grow. It recommends more competition, transparent contracts, clearer ownership records, and stronger oversight of Kenya Power, KenGen, and other energy agencies. The next test is whether those reforms lower bills for businesses and households.