Construction work on the 1,068km long Kenya-Ethiopia transmission line project will commence in September 2013.
The Eastern Electricity Highway Project which cost USD 1.26 billion is expected to provide cheap power to Kenya from Ethiopia's hydro-electric plants.
Kenya Association of Manufacturers CEO, Betty Maina said the lower electricity costs would result in reduced production costs for companies and cost of living for workers.
"There are many investors who want to venture into Kenya but they are put off by the high cost of electricity. As a result, they flee to neighboring countries," Maina added.
Kenya Electricity Transmission Company and Ethiopian Electric Power will implement the project, while German engineering firm Lahmeyer International will supervise the project. The project is scheduled to be completed in September 2018.