Kenya Electricity Generating Company (KenGen) is set to begin manufacturing solar power kits as part of a broader move to diversify its revenue streams and tap into the increasing demand for alternative energy sources.

The project, which will be undertaken through a Public Private Partnership (PPP), aims to provide affordable and reliable solar solutions to both homes and businesses that are shifting away from the national grid.

According to the latest disclosures, the PPP Directorate approved KenGen’s concept note for the initiative in June, paving the way for the appointment of advisors who will help steer the project forward.

The state-owned power producer plans to select a transaction advisor by September, who will play a key role in guiding the development and implementation of the manufacturing plant.

The facility, to be established in Olkaria, Naivasha, will focus on producing solar photovoltaic (PV) modules and may later expand to manufacture supporting components such as inverters and battery storage systems.

The cost of setting up the plant has not been disclosed, but it forms part of KenGen’s strategy to meet the growing preference for solar among consumers seeking cheaper and more reliable energy.

“The proposed scope includes the design, construction, and operation of a manufacturing facility that will produce solar PV modules, and potentially extend into the assembly or production of complementary components such as inverters and battery storage systems,” the PPP Directorate states.

KenGen, which derives the bulk of its income from the sale of electricity to Kenya Power—accounting for at least 73 percent of its annual revenue—is looking to reduce its reliance on a single buyer by tapping into the expanding solar energy market.

There has been a significant rise in the number of businesses and households adopting solar installations to cut costs and avoid the frequent power outages associated with Kenya Power’s supply.

This shift has boosted the market for captive power solutions, especially solar.

Data from the Energy and Petroleum Regulatory Authority (Epra) shows that solar PV systems currently account for the largest share of captive power generation in the country, contributing 47.21 percent of the 574.6 Megawatts installed capacity.

As the demand for clean and independent power sources continues to grow, KenGen’s entry into solar kit manufacturing is expected to help bridge the supply gap and support Kenya’s transition to renewable energy.