Adani Energy Solutions Limited, a subsidiary of the Adani Group, has proposed a Private Initiative Proposal (PIP) valued at approximately Sh130 billion to improve Kenya’s power transmission infrastructure. This proposal aims to address the frequent blackouts by implementing three major projects:
1. A 206 km 400kV Gilgil-Thika-Malaa Transmission Line
2. A 400kV/220/132kV Substation at Rongai
3. A 95kV Tongai-Keringet-Chemosit Line
John Mativo, Managing Director of the Kenya Electricity Transmission Company Limited (Ketraco), confirmed that the proposal is currently in the draft project agreement phase. This includes approval of the projects and risk assessment reports prepared by the negotiating team.
Ketraco has also completed four stages of due diligence for another consortium involving Africa50 and PowerGrid from India, which is focused on constructing two transmission lines between Samburu and Western Kenya.
However, Adani’s involvement in this project comes amid controversy over a separate $1.85 billion (Sh238 billion) deal for operating Jomo Kenyatta International Airport (JKIA) for the next 30 years.
This deal has faced public criticism, particularly after President William Ruto initially claimed to be unaware of it. The Kenya Airports Authority (KAA) later confirmed the agreement through local newspaper advertisements, raising concerns about transparency and governance.
Mativo noted that Ketraco has successfully renegotiated the contract sum for the energy projects from $1.014 billion (Sh130 billion) to $736 million (Sh95 billion) and aims to reduce it further to below $600 million (Sh77 billion), with a target of $320 million (Sh41 billion). If Adani Energy Solutions secures the contract, the firm will manage the facilities for the next three decades.
Mativo mentioned that Adani Energies is currently charging 11.5% interest on the debt. Ketraco is working to reduce this rate to single digits and aims for a return on equity of 14%. Lowering these rates would reduce the overall financial burden on Ketraco, making the project more cost-effective and sustainable. “The law gives us six months, so we have until December to finish the negotiations,” Mativo said.
