Inside Kenya's Sh375bn bet on gas power plant to end the cycle of blackouts

Kenya plans to build a 1,200-megawatt gas-fired power plant at Dongo Kundu in Mombasa, in what would be one of the largest single energy investments in the country's history.

The project is estimated to cost USD2.9 billion (Sh375 billion) and will be developed by state-owned KenGen in partnership with private investors.

The government is currently seeking transaction advisers to design and structure the project.

The plant would run entirely on imported liquefied natural gas (LNG).

Kenya has no domestic natural gas reserves large enough to fuel a facility of this scale, meaning fuel will need to be shipped in, with Mombasa's port infrastructure serving as the entry point.

The push comes as electricity demand climbs steadily.

Kenya's peak demand hit 2,439 megawatts in December 2025, and the government has set a target of 15,000 megawatts of installed capacity by 2030.

Current installed capacity stands at around 3,840 megawatts, meaning the country needs to more than triple its generation base in five years.

Energy Principal Secretary Alex Wachira has said the country urgently needs an additional 300 megawatts before 2027 and a further 300 megawatts by 2028.

The Dongo Kundu plant, at 1,200 megawatts, is designed to address that gap.

The project is also part of a broader fuel transition.

Kenya currently operates several power plants that run on heavy fuel oil (HFO), which is expensive and polluting.

The government plans to retire or convert all HFO plants to LNG by 2030.

The Dongo Kundu plant would anchor that shift, establishing LNG as a transition fuel to bridge the gap between Kenya's current energy mix and its long-term renewables ambitions.

Kenya's power grid is already heavily weighted towards clean energy.

Geothermal leads the mix at 25.9 per cent of installed capacity, followed by hydropower at 24 per cent, thermal at 17.2 per cent, solar at 14.1 per cent, and wind at 12 per cent.

The introduction of gas-fired baseload power is meant to stabilise a grid that is increasingly dependent on weather-sensitive sources.

Dongo Kundu is not a new idea.

The site was first proposed for a 700-megawatt gas plant in 2014, with Kenya securing an LNG supply agreement from Qatar at the time.

That project was dropped in 2016 after attracting only two bids.

It was revived in 2020 under then-Energy Secretary Charles Keter, but again made little progress.

The current iteration is larger, at 1,200 megawatts, and arrives in a very different demand environment.

The plant's location within the Dongo Kundu Special Economic Zone is considered an advantage.

The site sits close to Mombasa Port, reducing the cost and complexity of bringing in LNG and connecting the plant to grid infrastructure.

For ordinary Kenyans, the case for the project rests on electricity costs and reliability.

Gas-fired power is generally cheaper to produce than oil-based thermal generation, and more dispatchable than solar or wind.

If the plant delivers on that promise, it could ease pressure on electricity prices at a time when high power costs are a recurring complaint from households and manufacturers alike.

The risks are real, however.

Previous LNG projects in Kenya, including a terminal feasibility study that ran from 2021 to 2024, have repeatedly stalled over financing and fuel supply complications.

The project remains at an early planning stage and has yet to secure funding or a fuel supply agreement.