Learning from Power Sector Reform Experiences : The Case of Kenya
Two successive waves of reform have fundamentally altered the structure and organization of Kenya's vibrant power sector, which boasts a tradition of strong technical and commercial performance. In the first wave -- beginning in 1996 and large...
| Main Authors: | , |
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| Format: | Working Paper |
| Language: | English |
| Published: |
World Bank, Washington, DC
2019
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| Subjects: | |
| Online Access: | http://documents.worldbank.org/curated/en/451561555435655366/Learning-from-Power-Sector-Reform-Experiences-The-Case-of-Kenya http://hdl.handle.net/10986/31561 |
| Summary: | Two successive waves of reform have
fundamentally altered the structure and organization of
Kenya's vibrant power sector, which boasts a tradition
of strong technical and commercial performance. In the first
wave -- beginning in 1996 and largely donor-driven -- policy
and regulatory functions were separated from commercial
activities; generation was unbundled from transmission and
distribution; cost-reflective tariffs were introduced; and
generation was liberalized. In the second wave -- beginning
in 2002 and led by domestic reform champions -- the thrust
of first-wave reforms was continued, with the strengthening
of independent regulation, partial privatization of the
generation company (KenGen), and establishment of
complementary entities. Although the government retains
majority ownership of the largest power utilities in the
country (Kenya Power, ~51 percent; KenGen, ~70 percent),
Kenya has been able to position itself as one of the
foremost destinations in the region for private energy
investment. The reforms have improved the operational
efficiency of the sector, increased cost recovery, and
captured a significant amount of private sector investment.
At the same time, the state has remained an important
investor, playing a pivotal role in expanding generation
capacity, scaling up electrification at an exceptionally
rapid pace, and leading diversification toward geothermal
energy. Political influence in sector decisions remains
significant, in planning and tariff reviews. |
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