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The Eastern Africa Power Pool (EAPP) has become an important test of whether regional electricity cooperation can support energy security, affordability, and low-carbon development in Africa. The region has substantial energy resources, including hydropower, geothermal, wind, solar, and gas, but these resources are unevenly distributed across national systems. At the same time, electricity demand is rising, urban centres are expanding, and climate pressures are increasing the vulnerability of generation and transmission systems. The challenge is therefore not only to build more generation capacity, but to create a regional electricity system that can move power reliably, price it transparently, and finance the institutions needed for cross-border electricity trade.

The economic case for interconnection is strong. Countries with surplus generation can export power, while countries facing shortages can import electricity at lower costs than building equivalent domestic capacity. The Ethiopia–Kenya Eastern Electricity Highway illustrates this case. The project consists of a 500 kV high-voltage direct-current transmission line of about 1,043–1,065 km, designed for up to 2,000 MW of bidirectional power transfer between Ethiopia and Kenya. 

The World Bank’s implementation completion report records the project’s final cost at US$823.6 million, compared with appraisal estimates of US$1.11 billion; major components included US$261.9 million for the transmission line and US$443.4 million for converter substations. The project’s stated objectives were to increase the volume and reduce the cost of electricity supply in Kenya, while generating export revenues for Ethiopia. 

Other recent interconnectors show that regional power trade requires substantial, long-term capital mobilisation. The Kenya–Tanzania Power Interconnection Project involves a 400 kV line of roughly 507–510 km, including about 93–94 km in Kenya and more than 414 km in Tanzania. Reported financing for the project included approximately US$259 million from the African Development Bank (AfDB) and the Japan International Cooperation Agency (JICA). The AfDB’s project documentation identifies the line as a major transmission investment, intended to improve supply reliability and regional trading capacity. 

The Tanzania–Zambia Transmission (TAZA) Interconnector is even larger in terms of financing. World Bank documentation for the TAZA project records a proposed total operation cost of US$755 million, including US$615 million from IDA, US$100 million from the Agence Française de Développement (AFD), US$30 million from the European Commission and US$10 million in counterpart funding. Its infrastructure component includes approximately 620 km of 400 kV double-circuit transmission lines and associated substations. On the Zambian side, Reuters reported in 2025 that the Zambia–Tanzania link would resume construction as a US$320 million project, with remaining work estimated at US$298 million, including a US$245 million World Bank grant. 

These figures show that EAPP integration is not a marginal technical exercise; it is a capital-intensive regional infrastructure agenda. Individual interconnectors commonly require several hundred million dollars, and larger electricity highways can exceed US$800 million to US$1 billion, depending on scope, converter stations, substations, system reinforcement, resettlement costs, and technical assistance. Financing, therefore, needs to cover not only the visible assets of transmission lines and substations, but also the less visible systems that allow trade to function: market rules, settlement platforms, grid codes, dispatch coordination, utility creditworthiness, metering, system protection, and climate-resilient planning.

The strategic value of the EAPP is particularly clear because member countries have complementary resource endowments. Ethiopia has substantial hydropower potential and is emerging as a regional exporter. Kenya has developed geothermal power, alongside wind and solar. Tanzania combines hydropower and gas and occupies a strategic position between the Eastern and Southern African power pools. 

Uganda, Rwanda, Burundi, Sudan, South Sudan, Djibouti, Somalia, Egypt, Libya, and the Democratic Republic of Congo each bring different resource bases, infrastructure conditions, and investment needs. A regional power pool allows these differences to become sources of complementarity rather than fragmentation. Countries facing shortages can import; countries with surplus generation can export; and systems with variable renewable energy can draw on balancing resources elsewhere in the region.

Interconnections can also support renewable energy integration. A larger regional market makes it easier to absorb variable wind and solar generation because variability can be balanced across a wider geographic area and a more diverse generation mix. This is especially important for an EAPP system in which hydropower remains central but is increasingly exposed to drought, rainfall variability, and climate uncertainty. Cross-border transmission can reduce the risk of overdependence on any single national resource base, while also helping countries avoid unnecessary duplication of generation investments.

However, physical infrastructure alone will not deliver a functioning regional electricity market. A transmission line can be built, but if domestic grids are weak, utilities cannot pay, tariffs do not reflect costs, or settlement systems are unreliable, the line will operate below its potential. The experience of recent projects confirms this point. The Ethiopia–Kenya line required not only the HVDC transmission link but also converter stations, system reinforcement in Kenya, environmental and social management, project supervision and technical assistance. The TAZA project similarly includes institutional strengthening for TANESCO and technical assistance to the EAPP, including support for market rules and operational coordination.
 
The financing discussion should therefore shift from a narrow project-finance approach to a system-finance approach. EAPP investments should be assessed as regional public goods that generate benefits across borders: lower generation costs, improved reliability, reduced reserve margins, greater renewable energy integration, and enhanced energy security. 

This requires blended finance from multilateral development banks, concessional windows, bilateral lenders, climate funds and, where risks can be appropriately allocated, private capital. It also requires stronger guarantees, payment security mechanisms, and regional regulatory coordination so that buyers, sellers and financiers have confidence in long-term cross-border contracts.

Climate risk should be built into this financing model from the outset. Eastern Africa’s electricity systems are exposed to drought, hydropower variability, heat stress, flooding, and changing demand patterns. A regional power pool that depends heavily on hydropower and long-distance transmission must assess how future climate conditions could affect generation availability, transmission reliability, and cross-border flows. 

Climate-resilient planning should, therefore, be treated as part of the investment case, not as an environmental add-on. In practice, this means financing grid reinforcement, weather-resilient transmission design, diversified renewable portfolios, regional reserve-sharing arrangements, and institutional capacity for climate-informed dispatch and planning.

Galila Khougali is a researcher focusing on regional energy transitions and systems resilience in Eastern Africa, specifically the Eastern Africa Power Pool, at UCL’s Bartlett School of Environment, Energy and Resources. Drawing on modelling and policy analysis, her research contributes to work on energy transitions, climate resilience, and sustainable businesses and finance.