The largest share of Kenya's electricity supply comes from hydroelectric stations at dams along the upper Tana River, as well as the Turkwel Gorge Dam in the west. A petroleum-fired plant on the coast, geothermal facilities at Olkaria (near Nairobi), and electricity imported from Uganda make up the rest of the supply.

Kenya's installed capacity stood at 1,142 megawatts between 2001 and 2003. The state-owned Kenya Electricity Generating Company (KenGen), established in 1997 under the name of Kenya Power Company, handles the generation of electricity, while the Kenya Power and Lighting Company (KPLC), which is slated for privatization, handles transmission and distribution. Shortfalls of electricity occur periodically, when drought reduces water flow. To become energy sufficient, Kenya aims to build a nuclear power plant by 2017.
Workers at Olkaria Geothermal Power Plant

Hydrocarbon reserves have yet to be discovered on Kenya's territory, despite several decades of intermittent exploration. Kenya currently imports all crude petroleum requirements. Kenya, east Africa's largest economy, has no strategic reserves and relies solely on oil marketers' 21-day oil reserves required under industry regulations. Petroleum accounts for 20 to 25 percent of the national import bill.

Although Kenya is yet to give a formal indication of where its exploration program, which now involves half a dozen companies, is headed, in recent weeks, well-placed sources in Uganda's oil industry have suggested that the country is on the verge on making an announcement that could cement East Africa's position as major oil region on the continent. Optimism surrounding the Kenyan program is informed by recent oil discoveries in Uganda that, combined with the fact that the rocks that form the East African Rift System are about the same age, suggests a high potential for oil in Kenya. Gas discoveries in Tanzania and significant proven oil reserves along the border between Uganda and DR Congo have also encouraged interest in the once largely overlooked region. Reacting to the current speculation about prospects for an early oil find, senior geologists at Uganda's Energy Ministry who were at the forefront of the country's search for oil two decades ago, said they had no reason to doubt that there was oil in Kenya, with the area around Lake Turkana and the coastal belt being singled out as the most promising prospects.[67]

Before its exit mid this year, China National Offshore Oil Corporation (CNOOC) had worked with Africa Oil and Lion Energy Corp to drill an exploratory well in block 9 in northern Kenya. It also had a license for block L2, an inland area in the Lamu basin.

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