On February 7th, 2025, the Kenyan Parliament passed comprehensive Energy Management Regulations, which among other things is regulating the energy services market, including Energy Service Companies (ESCO). This legislation, a major update of the Energy Management regulation from 2012, is a significant step towards enhancing energy efficiency and promoting sustainable development in Kenya.
The new regulations are well-aligned with policy recommendations provided by UNEP Copenhagen Climate Centre in the formulation of Kenya’s energy efficiency strategy as well as recent policy advice published by the Global ESCO Network, hosted by the Centre, targeted specifically at the energy services market.
Among the policies instituted by the new regulation are mandatory audits of energy consuming entities above a threshold by licensed energy auditors, and further requiring entities covered by the regulation to draft investment plans for implementing at least 50% of the identified energy efficiency potentials.
Additionally, the regulations establish a licensing system for ESCOs and standard contracts in the sector, ensuring quality, transparency, and effectiveness in energy performance contracts and actions.
Building on Kenya’s energy efficiency strategy
The ESCO regulations are the latest step in Kenya’s journey towards energy efficiency. The Kenya Energy Efficiency and Conservation Strategy, launched in September 2020, marked the culmination of a five-year agreement between UNEP Copenhagen Climate Centre and the Ministry of Energy and Petroleum of Kenya. The Centre provided support in data collection, preparing the initial draft, reviewing intermediate drafts, and producing the final strategy.
UNEP Copenhagen Climate Centre has continued to provide technical support to the Ministry of Energy in developing the Implementation Plan for the Kenya Energy Efficiency and Conservation Strategy. This includes professional training for energy efficiency practitioners, deployment of renewable energy, and NDC transparency work.
Aligning with global ESCO standards
The Global ESCO Network’s policy recommendations advocate for standardized contracts, accreditation registries, and financing mechanisms to facilitate and promote ESCO operations. Kenya’s new regulations may well serve as a model for other countries looking to enhance their energy efficiency frameworks.
A collaborative effort for energy efficiency
UNEP Copenhagen Climate Centre’s involvement in Kenya’s energy efficiency initiatives underscores the importance of collaboration in achieving sustainable development goals. By working together, UNEP Copenhagen Climate Centre, the Ministry of Energy and Petroleum have laid a strong foundation for Kenya’s energy future, ensuring that the country can meet its climate goals and improve the quality of life for its citizens.
The Global ESCO Network is part of UNEP Copenhagen Climate Centre’s work through the Global Platform for Urban Climate neutrality (GPUC), implemented by the Centre and funded by the Ministry of Foreign Affairs of Denmark (Danida).
