The Ministry of Energy has been directed to comprehensively deal with the challenge of power failure.
President William Ruto, who chaired the Cabinet meeting on Wednesday, said frequent power outages were hurting Kenya’s investment profile.
The Cabinet discussed the matter extensively and resolved that the transmission line system should be unbundled so that power failure in one part does not affect the entire country.
To deal with overloading of transmission lines that causes outages, the Bomet-Narok line will be built with $250million (Sh37.5 billion) from the African Development Bank.
The line, which was funded in 2016, has not been built due to legal disputes.
Additionally, a $57 million (Sh8.55 billion) KenGen solar power project at the Seven Forks Dam will provide a safeguard against power failure.
The 42MW project has a huge battery storage and when power fails, the stored energy kicks in.
The project helps to save hydro-power at the five dams that make up the Seven Forks.
The Cabinet was informed that negotiations on the Kenya-EU Economic Partnership Agreement have been completed. It is expected to be signed next week.
The agreement, which gives Kenya more access to the EU market, will be taken to Parliament for ratification.
It is the most ambitious EU deal with any African country in terms of climate protection and labour rights. The negotiations started in 2002.
In 2016, efforts to have the East African Community states sign together failed.
On El Nino, the Cabinet was told the national government has worked with counties, the Kenya Red Cross and other humanitarian organisations to provide food, rescue and relocate displaced people.
The Cabinet was also informed that Comesa has once again extended Kenya's sugar import quotas, which were ending this year. However, this is the last time the extension will be given.
The Cabinet also discussed various papers, including the National Agricultural Insurance Policy, the National Extension Services Policy, the Draft Languages of Kenya Policy, the National Forest Policy among others.