Kenya Signs 30-Year Adani-KETRACO Deal Despite Public Disapproval

Kenya Signs 30-Year Adani-KETRACO Deal Despite Public Disapproval

Despite opposition, Kenya has officially signed a power deal with India’s Adani Energy Group worth Ksh95 billion to build 422 kilometers of critical transmission lines.

Energy Cabinet Secretary Opiyo Wandayi announced the agreement on Friday, October 11, saying it represents a significant shift in power transmission across the country.

The contract, signed on October 9, 2024, follows four months of intense negotiations in which the Adani Group was scrutinized for its operational practices.

“This agreement marks the beginning of a transformative initiative to develop, finance, construct, operate, and maintain key transmission lines and substations across Kenya,” Wandayi stated in satisfaction.

KETRACO [@KETRACO1] & Adani Energy have signed a KES 95.6B ($736M) agreement to develop key transmission lines & substations after 4 months of negotiations:

Major projects:
—400kV Gilgil-Thika-Malaa-Konza (208.7km)
—220kV Rongai-Keringet-Chemosit (99.9km)
—132kV Menengai-Ol… pic.twitter.com/eCSl6L3psN
— Mwango Capital (@MwangoCapital) October 11, 2024

Despite concerns about the Adani Group, which has been embroiled in numerous controversies, Wandayi has defended the mega-partnership.

He emphasized the critical need for improved electricity infrastructure to support Kenya’s rapidly growing economy.

“Kenyans are well aware of the significant challenge that our country faces with persistent power blackouts,” he reiterated.

Kenya Electricity Transmission Company (KETRACO) announces successful signing of a Project Agreement with Adani Energy Solutions Ltd on Oct 9th, 2024.

Adani Energy Solutions Ltd will now raise all the funding (Kes 95.68 billion, US$ 736.0M) in form of debt & equity that will be… pic.twitter.com/8peF0BwXIo
— Julians Amboko (@AmbokoJH) October 11, 2024

Details about the agreement are still scarce, as KETRACO has chosen not to disclose specifics.

The Adani Group will finance the project, which is expected to cost Ksh95.68 billion (approximately USD 736.51 million), through a combination of debt and equity, with repayment scheduled over a 30-year period.

Wandayi stated that a competitive bidding process would ensure value for money, with a focus on prioritizing local content to create business opportunities for Kenyans.

However, the financial implications are significant, with reports indicating that the Adani Group may seek Ksh634.7 billion (USD 4.92 billion) from Kenyans over the next three decades.

This raises concerns about potential increases in electricity prices as the conglomerate works to recoup its investment.

The government is under pressure to clarify how this financial burden will affect consumers, particularly in a country where many already face high living costs.

The agreement calls for the construction of three high-voltage power transmission lines and two substations in strategic locations to improve the national grid’s connectivity and stability.

The 400kV Gilgil-Thika-Malaa-Konza line will cover 208.73 kilometers and include new substations in Gilgil, Thika, and Malaa.

Meanwhile, the 220kV Rongai-Keringet-Chemosit line, which spans 99.98 km, will add substations at strategic locations such as Rongai and Keringet.

According to Wandayi, thorough stakeholder engagement was carried out prior to the agreement’s finalization to ensure that all concerns were addressed.

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This proactive approach aims to increase Kenyans’ trust in the Adani Group’s involvement.

The signing of the agreement comes as it was revealed that the group is laying the groundwork to expand its operations in Kenya, with a new plan to build hydroelectric plants.

According to Reuters, Adani is eager to capitalize on Kenya’s untapped potential, citing favorable topography and hydropower demand.

However, concerns remain about the group’s controversial reputation and its operations in the region.

Kenya Signs 30-Year Adani-KETRACO Deal Despite Public Disapproval