East Africa’s contradictory energy strategy
By Philip Mwangangi
Here is the contradiction at the heart of East Africa’s energy story: the region is racing towards renewables while doubling down on fossil fuels. Kenya is praised for its clean power mix. Uganda is building a crude oil pipeline. Tanzania is pursuing a multibillion-dollar gas export terminal. Rwanda champions solar.
It is not hypocrisy but rather economic survival wrapped in the language of sustainability.
Kenya’s renewable success and its hidden costs
Kenya remains the continent’s renewable energy leader, with around 90% of its electricity generated from geothermal, hydro, wind and solar. The Olkaria geothermal complex, operated by KenGen, produces more than 800 megawatts. The Lake Turkana Wind Farm, financed through a public–private partnership, contributes 310 megawatts to the grid, according to the Energy and Petroleum Regulatory Authority (EPRA).
But the country’s clean reputation has limits. When droughts cut hydropower output or wind speeds fall, Kenya relies on costly diesel and heavy fuel oil plants. These thermal units, run by independent producers such as Gulf Power and Tsavo Power, often remain idle yet continue to receive capacity payments under fixed contracts. EPRA data show that thermal generation can cost up to four times more per kilowatt-hour than geothermal power.
As Daniel Kiptoo, EPRA’s director general, told Business Daily Africa in June 2024, “Our biggest challenge is not generation capacity but grid flexibility. Adding renewable plants is easy. Balancing them is not.”
Kenya’s Turkana oil ambition
While expanding its clean power base, Kenya has not abandoned fossil fuels. The government still plans to commercialise the Turkana oil reserves in the country’s northwest. British firm Tullow Oil estimates that the South Lokichar Basin holds recoverable reserves of 470 million barrels. The project, currently awaiting a final investment decision, could produce up to 120,000 barrels a day at peak output.
The Ministry of Energy and Petroleum argues that revenues from Turkana oil could help fund renewable energy expansion and regional infrastructure. Critics, however, say the plan risks locking Kenya into a carbon-intensive future just as the world moves away from fossil fuels. Environmental groups, including Friends of Lake Turkana, have called for full disclosure of the project’s social and climate impacts.
Uganda’s oil pipeline gamble
Across the border, Uganda’s government is advancing the East African Crude Oil Pipeline (EACOP), a 1,443-kilometre conduit linking Lake Albert’s fields to Tanzania’s coast at Tanga. Valued at about US$5 billion, the project is led by TotalEnergies and China National Offshore Oil Corporation (CNOOC).
Uganda expects to earn up to US$3 billion in annual revenue once production begins in 2025, according to the Petroleum Authority of Uganda. Yet environmental campaigners argue the project will threaten critical ecosystems and displace communities. Several global banks, including Standard Chartered and BNP Paribas, declined to finance the pipeline following international pressure from civil society groups such as 350.org.
Ali Ssekatawa, legal director of the Petroleum Authority, told Reuters that “Europe built its wealth on oil and gas. Now they tell Africa to stay poor in the name of climate justice. That’s not fairness, it’s economic gatekeeping.”
Tanzania’s gas dream
Tanzania is betting on natural gas. The government has confirmed plans to build a US$30 billion liquefied natural gas (LNG) terminal in Lindi, in partnership with Shell, Equinor and ExxonMobil. The plant aims to export around 10 million tonnes of LNG annually once completed, according to Reuters.
Negotiations for a final investment decision are expected to conclude in 2025. While the project promises export earnings, only about 3% of the gas will be used domestically, mainly for power generation and industrial development. For Tanzania, gas is seen as a driver of economic growth and a bridge fuel for industrialisation rather than a pure export commodity.
The economics of dual ambitions
Why are East African countries investing simultaneously in renewables and fossil fuels? The answer lies in fiscal and political realities.
Kenya’s reliance on renewables aligns with its lack of significant fossil reserves and the high cost of petroleum imports. For Uganda and Tanzania, however, untapped oil and gas represent billions of dollars in potential revenue and political capital.
This divergence illustrates what the International Energy Agency (IEA) calls the “energy trilemma”: balancing energy security, affordability and sustainability. For East African governments, short-term fiscal needs often outweigh long-term climate goals.
Reliability challenges and grid constraints
Even where renewable penetration is high, grid reliability remains weak. Kenya’s electrification rate now exceeds 75%, yet power outages are frequent. In April 2024, a nationwide blackout left more than 10 million people without electricity.
Businesses are responding by investing in backup generators and battery storage, increasing operational costs. The Kenya Association of Manufacturers reports that energy costs remain among the top three challenges for local industries.
Grid losses, estimated by EPRA at 22.7%, further undermine efficiency. Investments in storage and smart transmission could improve stability, but funding remains limited.
Regional integration and missed opportunities
The Eastern Africa Power Pool (EAPP) was established to allow countries to trade electricity across borders, improving reliability and reducing costs. In theory, Ethiopia’s hydropower could stabilise Kenya’s wind, while Uganda’s geothermal could back up Tanzania’s gas.
However, political coordination and infrastructure gaps have slowed progress. The African Development Bank (AfDB) estimates that cross-border power trade in the region remains below 10% of its potential.
Financing the transition
The region’s energy transition depends on financing. The IEA estimates that sub-Saharan Africa requires US$25 billion in annual clean energy investment through 2030 to meet sustainable growth targets. Yet actual flows fall far short.
Western financiers often cite political risk, currency volatility and weak regulatory frameworks as barriers. China has filled part of the gap, but data from the Boston University Global Development Policy Center show that less than 2% of China’s US$52 billion in African energy loans since 2000 have gone to renewables.
As Kampala-based environmental activist David Kibirige told The EastAfrican, “We keep hearing promises, but what we see are pipelines and rigs, not solar farms.”
The human impact of clean energy
Even renewable projects have complex social costs. In Kenya’s Rift Valley, communities near geothermal sites such as Olkaria have reported displacement and inadequate compensation. A 2023 Human Rights Watch report noted that indigenous Maasai families lost ancestral land access despite promises of resettlement.
KenGen says it has followed international standards for compensation and stakeholder consultation. The controversy reflects the broader challenge of implementing clean energy in a way that benefits local communities.
Between climate goals and economic reality
East African governments face a difficult balancing act: expanding energy access, fostering industrialisation and meeting climate commitments. Natural gas is often portrayed as a “transition fuel”, but environmental groups argue that it entrenches fossil dependency.
According to the UN Environment Programme (UNEP), new oil and gas projects risk locking in emissions incompatible with the Paris Agreement’s 1.5°C target. Yet without affordable clean-energy finance, many countries see few alternatives.
A call for real investment
Kenya will continue adding geothermal and wind capacity while exploring Turkana’s oil. Uganda’s pipeline will move forward even as it eyes solar expansion. Tanzania’s gas will power both exports and domestic industries. Rwanda will deepen its off-grid solar push.
For the global community, the message is clear: if the world expects East Africa to leapfrog fossil fuels, it must provide credible, low-cost financing and technology transfer. Otherwise, the region will keep walking both paths, drilling for oil while installing solar panels.
It may not be elegant, but it reflects a reality shaped more by economic pragmatism than by ideology.
