Kenyans may soon pay higher fuel and electricity bills as the government moves forward with plans to create a Consolidated Energy Fund (CEF). The initiative, spearheaded by Energy Cabinet Secretary Opiyo Wandayi, is designed to pool resources from across the energy sector to finance large-scale infrastructure projects.
The fund will support the construction of power transmission lines, hydropower stations, and renewable energy programs, as well as research and technical training. However, the required contributions from energy stakeholders are expected to be passed on to consumers through additional levies.
Government Seeks Alternative Funding
With public debt and fiscal pressures mounting, the government aims to reduce dependence on loans and external aid. The Consolidated Energy Fund will receive an initial KES 500 million allocation from Parliament, while additional financing will come from fines imposed by the Energy and Petroleum Regulatory Authority (EPRA), proceeds from energy-related asset recoveries, and government securities.
Officials argue the fund will provide a sustainable source of financing for energy projects, but economists caution that it could lead to new costs for households already grappling with inflation.
Kenyans Already Face Heavy Energy Levies
Consumers currently pay several existing charges on energy products. Petrol and diesel attract a Roads Maintenance Levy of KES 25 per litre, a Petroleum Development Levy of KES 5.40 per litre, and kerosene carries KES 0.40 per litre. On electricity, users pay a Rural Electrification Levy equal to 5% of consumption to fund rural power access.
Adding another levy under the CEF would raise the overall cost of living, particularly for low-income households and small businesses dependent on electricity and fuel.
Reform Priority in Strategic Plan
The Energy Ministry’s 2025–2029 strategic plan lists the new fund as a key reform aimed at accelerating energy expansion through domestic financing. It also outlines a separate petroleum fund to manage infrastructure decommissioning, community support programs, and safety compliance.
Though the government has not disclosed the rate or structure of the new charge, it is expected to affect either fuel, electricity, or both.
The Energy Fund is part of Kenya’s broader plan to strengthen energy independence, attract private investment, and ensure long-term sustainability in the power and petroleum sectors. Yet, without careful implementation, it risks further tightening the financial strain on ordinary Kenyans who already pay some of the region’s highest energy costs.
