Ethiopia starts selling power to Kenya, eyes $100m annual returns

Ethiopia on Thursday officially started commercial power exports to Kenya, the state power utility Ethiopian Electric Power (EEP) announced.

The long-awaited power sale to Nairobi comes one week after Ethiopia conducted a successful test run of electricity supply to Kenya via the 500KV cross-border transmission power line built to link power grids of the two neighbours.

In a statement, EEP said that Ethiopia has completed activities to ensure uninterrupted and reliable transmission of power to Kenya while noting that Kenya will similarly execute and implement pending activities on its part.

Ethiopia plans to earn as much as $100 million annually from electricity exports to Kenya.

Last month, Kenya signed a 25-year power purchase deal with Ethiopia to import 600 megawatts of electricity from Ethiopia.

The deal, which runs until 2047, makes Ethiopia Kenya's second biggest source of hydropower.

Cheaper power sources

Kenya has turned towards cheaper sources of electricity in a bid to edge out the expensive electricity from independent power producers and ensure buffers to meet peak demand.

Dubbed Ethiopia-Kenya Transmission Interconnection Line, the 1,045km long electricity highway has the capacity to transmit up to 2,000 megawatts.

The project is part of the Eastern Africa Power Pool (EAPP), a regional institution established in 2005 to coordinate cross-border power trade and grid interconnection among nations of the Eastern Africa region.

Currently, Ethiopia is exporting hydro-processed cheaper electricity to Sudan and Djibouti and last year, the horn of Africa nation earned $95.4 million from electricity exports to the two countries, according to EEP.

Ethiopia, has been investing billions of dollars in building hydropower plants in a bid to become the region's leading power exporter.

The country is preparing to start selling electricity to Eritrea, South Sudan and Somalia.

Addis Ababa has also signed memorandums of understanding with Somaliland, Tanzania and other African countries to supply them electricity.