Kenya leads the way in refurbishing ageing hydropower

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Hydropower accounts for about 20% of Africa’s total electricity generation. But many plants are old, with nearly half of the continent’s hydropower assets more than 30 years old and operating below capacity. To address this, several countries are pursuing refurbishment programs. This week, Kenya secured $64 million to revive one of its oldest hydro plants.

• The funding package includes a $40.7 million loan from Germany and a $23.3 million grant from the EU. It will be used to modernise the 64-year-old Gogo hydropower plant, boosting its capacity fourfold to 8.6 MW.

• Refurbishing existing hydropower plants is emerging as the fastest and most cost-effective way to add new capacity, compared to building new plants from scratch. It uses existing infrastructure, reduces capital outlay and construction time.

More details

• The refurbishment of the Gogo Hydropower Plant will include desilting the dam, constructing a new powerhouse with two vertical turbine generators, and building a 29.9 km transmission line. The project will be carried out by the Kenya Electricity Generating Company (KenGen), a state-owned power producer, and is expected to be completed within 30 to 36 months.

• Kenya has long struggled to meet electricity demand in the western region due to insufficient transmission capacity. The area has faced frequent load shedding, forcing industrial clients to rely on backup generators to sustain operations. The redevelopment of the Gogo plant is therefore a key step in supporting a reliable power supply and advancing Kenya’s strategy to decentralise industrial growth.

• Refurbishing old hydropower plants is increasingly seen as a more cost-effective alternative to building new ones. A key factor driving this push is the Levelized Cost of Electricity (LCOE), which captures the total lifetime cost of a power plant divided by its output. The LCOE for refurbished hydropower ranges from just $0.01 to $0.05/kWh, significantly lower than the $0.02 to $0.19/kWh typical for new large hydropower projects. New hydropower plants, by contrast, are not only expensive but also prone to delays and budget overruns. 

• Last year, KenGen advertised for a consultant to carry out feasibility studies on nine of its 13 hydropower plants built between 1954 and 2012. With major hydropower Power Purchase Agreements (PPAs) expiring by 2028, KenGen aims to boost capacity and renegotiate new PPAs from a stronger position. The company has already refurbished at least three hydropower plants, adding about 57.6 MW of capacity at a lower cost compared to new construction. 

• Kenya’s strategy reflects a broader continental trend. Many African countries with ageing hydropower assets are pursuing modernisation programs. The African Development Bank (AfDB) recently launched a $9.72 million fund to support the modernisation of 12 privately owned projects in eight African countries. In general, modernising Africa's hydropower plants is expected to bring an additional 0.8 GW of currently idle capacity back online. 

• Beyond Kenya, other African nations are making substantial gains. In Angola, the Luachimo hydropower station was modernised and expanded, increasing its capacity from 8.8 MW to 34 MW. Mozambique's Cahora Bassa plant, one of Africa's largest, has seen a major rehabilitation project that aims to increase the capacity of each of its five turbines by over 4%. In June this year, Serengeti Energy secured funding to refurbish two hydroelectric power plants in South Africa. 

Our take

• While refurbishment lowers costs and adds capacity, Africa must still balance hydropower with solar, wind, and storage. Climate risks such as drought can affect hydropower output, meaning diversification remains critical for long-term resilience.

• For Kenya, there is still potential to develop greenfield small hydropower projects, particularly through the private sector, targeting small-scale industrial use in the agriculture sector, such as tea and coffee processing. These projects could help open up rural areas for industrialisation and boost economic activities.

• Across Africa, there is a need for stronger partnerships and policies that facilitate investment in hydropower generation. Liberalising the electricity sector to allow multiple players in generation, transmission, and trading would promote competition, improve efficiency, and help drive electricity prices down.