Kenya is accelerating its energy strategy with a mega-project: a 1.2 GW natural gas-fired power plant in Dongo Kundu, near Mombasa. Estimated at USD 2.9 billion, this public-private partnership aims to address the energy deficit in the face of soaring demand, projected to increase from 1,800 MW in 2018 to over 2,400 MW in 2025.
Energy Context: Exploding Demand
Kenya is experiencing record growth in electricity consumption, driven by rural electrification, industrialization, and the rise of data centers. Peak demand reached 2,439 MW in December 2025, exceeding the current capacity of 3,200 MW connected to the national grid.
The Dongo Kundu power plant, fueled by imported LNG, will:
- Add 300 MW by 2027 and another 300 MW in 2028
- Stabilize the grid during peak consumption periods thanks to the flexibility of gas
- Support the target of 15 GW of installed capacity by 2030
Strategic Location in Dongo Kundu
The choice of Dongo Kundu, in the Mombasa Special Economic Zone, is not insignificant. This rapidly expanding industrial platform already houses factories and attracts foreign investors. The gas-fired power plant will become its main energy engine, creating an integrated industrial ecosystem.
KenGen (the state-owned electricity company) will manage the project with private investors through a public-private partnership (PPP). The government is currently recruiting financial advisors to structure this large-scale operation.
Ambitious Financing and Timeline
With a cost of USD 2.9 billion (KES 375 billion), the project will require complex financial engineering: sovereign guarantees, long-term power purchase agreements, and multilateral financing. The transaction structuring process is underway, with commissioning expected between 2030 and 2032.
Regional Implications and Challenges
This project positions Kenya as an East African energy hub, potentially supplying Tanzania and Uganda via regional interconnections. It will also support the AfCFTA by reducing industrial production costs.
Key Challenges:
- Dependence on imported LNG (no domestic production)
- Meeting climate commitments in the face of an emitting project
- Coordination with the planned long-term 2 GW nuclear project
This 1.2 GW project marks a turning point in Kenya’s energy strategy: pragmatic gas use to secure growth, while maintaining a focus on renewables. The challenge now is to transform ambition into concrete reality.
