Campaigners argue the project is costly, damaging and out of kilter with the global switch towards renewables, which are safer and increasingly cheaper.
Kenya's environment court blocked Wednesday the construction of a coal plant along the country's idyllic coastline in a move hailed as a "big victory" by those waging a years-long fight against the project.
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"This is a big victory, this is a big day for Lamu people, it's big day for Kenya, it's a big day for Africa and it's a big day for the world," said Mohamed Athman, a member of the Save Lamu activist group.
Judge Mohammed Balala "set aside" an earlier decision granting a licence to developers Amu Power, who wanted to build East Africa's first-ever coal-fired power plant near the Lamu archipelago.
Activists cheered and embraced in the National Environmental Tribunal in Nairobi as the order was given, halting the US$2 billion fossil-fuel project championed by the Kenyan government from proceeding.
Judge Balala ordered Amu Power to re-conduct an environmental assessment of the plant's impact on Lamu, an Indian Ocean tourist haunt that includes a UNESCO World Heritage site and boasts vibrant marine life.
The company was given 30 days in which to appeal.
The tribunal also ruled that the public had been inadequately consulted about the initiative, which has been in the planning stages for about six years and resisted along the way by activists and local communities.
"Justice is served at last," said Omar Elmawi, campaign coordinator from the deCOALonize movement.
This month scores protested in the streets of Nairobi against the project.
The station was to burn coal imported from South Africa, and would have been the first country in the region to establish such a fossil fuel plant.