East Africa's Power Pool Expands as Kenya, Ethiopia and Tanzania Link Grids

What happened?

Kenya Power and Lighting Company and Tanzania Electric Supply Company confirmed this week that a new 500-kilovolt high-voltage transmission line between Isinya, in southern Kenya, and Singida, in central Tanzania, has been fully energised and is now moving power in both directions. The link, financed with support from the African Development Bank and the World Bank, is designed to carry up to 400 megawatts and forms the backbone of a wider push to knit East African grids into a single trading market.

The interconnector had been under construction for close to seven years, delayed at various points by land compensation disputes, currency shortages and pandemic-era financing gaps. Its completion now allows Kenya's geothermal-heavy generation fleet and Ethiopia's hydropower surplus, already linked to Kenya via the existing Ethiopia-Kenya line, to reach Tanzanian consumers, while Tanzania's growing gas-fired and hydro capacity can flow north during Kenya's dry-season demand peaks.

Key points

• The 500-kilovolt Isinya-Singida line can carry up to 400 megawatts between Kenya and Tanzania.
• It connects to the existing Ethiopia-Kenya interconnector, creating a three-country transmission corridor.
• The project was financed with backing from the African Development Bank and the World Bank.
• The Eastern Africa Power Pool now links roughly a dozen utilities across the region for electricity trading.
• Officials say the line could cut Tanzania's reliance on costly emergency diesel generation during droughts.

What we know

According to figures published by the Eastern Africa Power Pool secretariat, member utilities traded a record volume of electricity across borders in the 2025 financial year, though total volumes remain small relative to each country's domestic generation. The new Kenya-Tanzania link is expected to roughly double the trading capacity available between the two countries, which had previously relied on a lower-capacity 220-kilovolt connection with frequent outages.

Kenyan officials say the line will also allow Kenya to export more of its geothermal output, which now accounts for close to half of the country's installed generation capacity according to the Kenya Electricity Generating Company, rather than curtailing plants during periods of low domestic demand. Tanzanian authorities, meanwhile, have pointed to the line as insurance against the kind of hydropower shortfalls that forced rolling blackouts in parts of the country in 2022 and again in early 2025 after weak rains reduced water levels at the Julius Nyerere hydropower dam.

Background

The Eastern Africa Power Pool was established in the mid-2000s as one of several regional bodies, alongside the Southern African Power Pool and the West African Power Pool, intended to let African utilities trade electricity across borders rather than each country building isolated, and often underused, generation capacity. Progress has historically been slow, hampered by mismatched regulatory frameworks, currency risk in cross-border settlement, and chronic underinvestment in transmission infrastructure relative to generation.

Ethiopia's completion of the Grand Ethiopian Renaissance Dam, and its subsequent exports of hydropower to Kenya and Djibouti, has been the pool's most visible success story to date, generating hundreds of millions of dollars in export revenue for Addis Ababa according to Ethiopian Electric Power. The new Kenya-Tanzania line extends that logic southward, and African Union energy officials have described it as a proof point for the broader ambition of a continent-wide interconnected grid envisioned under the African Union's Programme for Infrastructure Development in Africa.

Detailed analysis

The economic logic behind regional power pooling is straightforward: different countries have different generation mixes and different demand peaks, so trading surplus power across borders can be cheaper than building new plants that sit idle much of the year. Kenya's geothermal plants run at high, stable output regardless of weather; Ethiopia's hydropower swells with the rains; Tanzania's mix of gas and hydro varies with both rainfall and offshore gas field output. In theory, a well-integrated grid lets each country lean on the others' strengths.

In practice, the gains have been constrained by transmission bottlenecks rather than generation shortages, which is why the new line matters more than its headline capacity might suggest. Analysts at the International Energy Agency have noted in regional assessments that sub-Saharan Africa's transmission networks have lagged well behind generation investment over the past two decades, leaving power stranded in some countries while neighbours face shortages. The World Bank has estimated that closing this gap across the continent would require tens of billions of dollars in transmission spending, far more than has flowed into the sector to date.

There are also commercial risks that pooling has yet to fully resolve. Utilities in the region operate under different tariff structures, some regulated well below cost-recovery levels, which complicates cross-border settlement and can leave state utilities exporting power at prices that do not reflect true generation costs. Currency mismatches add another layer of risk: contracts are frequently denominated in US dollars while retail tariffs are collected in local currency, exposing utilities to exchange-rate losses during periods of currency depreciation, a recurring problem for Kenya's shilling and Tanzania's shilling alike over the past three years.

Why it matters

For households and businesses, the practical benefit of grid integration is fewer and shorter blackouts, particularly during droughts that reduce hydropower output, a recurring vulnerability across East Africa given the region's reliance on rain-fed dams. Manufacturers in Tanzania's industrial corridor around Dar es Salaam, which have previously had to run diesel backup generators during dry-season shortfalls, stand to benefit most directly from more reliable imported power.

More broadly, deeper regional power trade is one of the more tangible steps toward the kind of economic integration that the African Continental Free Trade Area is meant to encourage. Reliable, competitively priced electricity is consistently cited by investors surveyed by organisations such as the African Development Bank as one of the biggest constraints on manufacturing investment in the region, ahead of factors such as labour costs or market access.

What happens next?

The Eastern Africa Power Pool secretariat says it is working with member utilities on a common market design that would allow day-ahead trading of electricity, similar to systems used in European and North American markets, rather than the bilateral long-term contracts that currently dominate cross-border trade. A pilot of this competitive market mechanism is expected to be tested among a smaller group of utilities before wider rollout, though officials have not given a firm date.

Further transmission projects are also in the pipeline, including a planned line extending the corridor south toward Zambia, which would eventually link the Eastern and Southern African Power Pools into a single interconnected system stretching from the Horn of Africa to South Africa. Financing for that extension remains under negotiation with multilateral lenders.

Insight Media Opinion

Transmission lines rarely make headlines the way new power plants do, but they are frequently the more consequential investment. East Africa does not suffer primarily from a lack of generation capacity; it suffers from an inability to move the power it already has to where demand is highest and reliability is weakest. The Isinya-Singida line, unglamorous as it is, addresses precisely that mismatch, and its slow, difficult seven-year path to completion is a useful reminder of how much harder infrastructure integration is in practice than it sounds in policy documents.

The bigger test now is institutional rather than physical. Cables can be built with sufficient financing and political will; a functioning cross-border electricity market that fairly prices power, settles reliably across currencies and survives the political temptation to prioritise domestic supply during shortages is a harder and slower achievement. If the Eastern Africa Power Pool can turn this new capacity into genuine day-ahead trading rather than occasional bilateral deals, it will have done more for regional industrial competitiveness than most single infrastructure projects manage. That outcome is not guaranteed, and the region's history of underused interconnectors elsewhere is a caution against premature celebration.