Countries also began cross-border electricity trade to improve energy reliability
Leaders pledged removing trade barriers by May 2026 to boost investment
Kenya and Tanzania signed an agreement on Monday to study the feasibility of a natural gas pipeline between Dar es Salaam and Mombasa, while also launching cross-border electricity trade.
The deal was signed in Dar es Salaam in the presence of Presidents Samia Suluhu Hassan and William Ruto during a state visit that resulted in eight agreements covering energy, infrastructure, trade and security.
The two countries have tasked their energy ministers with carrying out a joint study to assess the technical, financial and environmental feasibility of the pipeline. The proposed route would link Tanzania’s gas reserves to Kenya’s industrial hubs, with the aim of easing energy supply constraints and lowering costs for businesses.
Authorities said the project could support industrial expansion along the East African coast. It has been presented as a tool for regional energy integration and more efficient gas distribution. The agreement also formalizes the start of power trading between the two countries, a step expected to improve grid reliability and strengthen energy supply.
The project will proceed in phases. The feasibility study will determine whether the two countries move ahead with investment, while cross-border electricity trade can be implemented more quickly to address immediate supply needs.
Trade constrained by non-tariff barriers
The agreement comes against a backdrop of substantial but underperforming economic ties. Bilateral trade reached $860 million in 2025, a level both countries consider below potential. Ruto said trade could have exceeded $1 billion without the non-tariff barriers that continue to restrict the flow of goods and services.
Both leaders pledged to remove those administrative obstacles by the end of May 2026. Monitoring mechanisms have been set up, including regular consultations through joint trade cooperation bodies.
The main objective is economic. Both countries want to ease trade, attract investment and strengthen the competitiveness of their economies. Ruto estimated that removing the barriers could generate up to $500 million in additional cross-border investment over three years.
Agreements go beyond energy
Beyond energy, the agreements cover rail and maritime transport, agriculture, judicial assistance and the mutual recognition of professional certifications. The two countries also discussed major infrastructure projects, including electricity interconnections, road corridors and a railway line linking northern Tanzania to Kenya.
The projects are intended to tackle broader regional trade bottlenecks. Kenya and Tanzania account for roughly 40% of intra-community trade within the East African Community and play a central role in connecting landlocked countries to international markets. Infrastructure development and regulatory harmonization are therefore seen as prerequisites for deeper trade integration.
Whether the commitments translate into concrete action will depend on progress in removing non-tariff barriers, regulatory coordination and the findings of the feasibility study. If the pipeline project is validated, it could help build a regional energy market and provide lasting support for industrialization and trade in East Africa.
Olivier de Souza