Done deal: More queries as Sh95b power deal with Adani is signed

Energy Cabinet Secretary Opiyo Wandayi during his vetting. [Elvis Ogina, Standard]

The government has inked a contentious power transmission agreement worth $736 million (Sh95.68 billion) with Adani Energy Solutions Ltd, an Indian firm owned by billionaire Gautam Adani. 

The deal, finalised on October 9, will allow Adani Energy Solutions to develop, finance, construct, operate, and maintain crucial transmission lines and substations across Kenya, Energy Cabinet Secretary Opiyo Wandayi announced yesterday. 

Mr Wandayi dismissed the controversies surrounding the agreement, asserting that the initiative seeks to tackle Kenya’s ongoing power outages and strengthen its electricity infrastructure. 

“Kenyans are acutely aware of the challenges posed by persistent power blackouts. This project aims to significantly enhance our national electricity infrastructure by ensuring reliable access to power that supports Kenya’s economic growth and development objectives,” said the CS. 

This agreement is the latest in a series of multibillion-dollar contracts pursued by the Adani Group, which has raised concerns among Kenyans over the firm’s contentious business practices and the opacity of financial arrangements.  

The firm recently came to the public domain after it emerged it is in line to be awarded a controversial tender to manage Kenya’s and the region’s biggest airport, Jomo Kenyatta International Airport (JKIA), in a deal said to not have been subjected to competitive bidding.

If upheld, it could lead to Adani operating JKIA for 30 years, in exchange for Sh238 billion.

This arrangement has raised concerns among entities like the Law Society of Kenya and the Kenya Human Rights Commission, who argue against surrendering such a crucial and profitable asset to a private entity.

A group of doctors have at the same time gone to court, claiming that the involvement of Apeiro Ltd, a company with links to Adani Group, in the Universal Health Coverage (UHC) management system tender, is reason enough for Kenyans to worry about their data.

Apeiro holds the largest stake in a consortium that was awarded the Sh104 billion deal to provide an Integrated Healthcare Technology System for the UHC programme.

In their case filed before the High Court in Nairobi, Dr Clarence Eboso, Dr Darwin Abuka, Dr Cherono Siele and Dr Bosibori Ondari claimed that there is no guarantee that Kenyans’ data is secure. 

CS Wandayi yesterday defended the Sh95.68 billion energy sector deal, highlighting that Adani Energy Solutions was chosen through a competitive bidding process that promises substantial benefits for the nation. 

“The signing of this agreement concludes a protracted negotiation process lasting four months,” he said. Mr Wandayi emphasised that the project is projected to generate thousands of jobs and stimulate the Kenyan economy. “Before finalising the agreement, KETRACO (Kenya Electricity Transmission Company) conducted thorough due diligence on Adani Energy Solutions and engaged stakeholders extensively,” he added. 

The CS revealed that the project will be funded through a combination of debt and equity, which will be repaid over 30 years.  

It was not immediately clear whether the debt would lead to a rise in electricity prices. 

Mr Wandayi however said the estimated project cost of Sh95.68 billion ($736 million) will be solidified through a competitive bidding process overseen by KETRACO and the project company, ensuring value for money for the country, he argued.

Nonetheless, critics contend that the deal may not serve Kenya’s best interests and suggest that the government explore alternative options.  

Mr Wandayi refuted these claims, asserting that the agreement was conducted transparently and fairly.   “The competitive bidding process will prioritise local content and business opportunities for Kenyans. Importantly, the Government of Kenya will incur no financial expenditure for this project,” emphasised Wandayi. 

He further noted, “The country will gain world-class energy infrastructure, demonstrating the government’s commitment to prudent fiscal management. Adani Energy Solutions will manage transmission lines for 30 years before transferring the project and its assets to KETRACO.” 

The deal encompasses the development of three transmission lines and two substations. 

They include the 400kV (Double-Circuit) Gilgil-Thika-Malaa-Konza Line. 

Stretching 208.73km, this line will include new substations at Gilgil, Thika, and Malaa, along with significant expansions at Konza. It also includes the 220kV Rongai-Keringet-Chemosit Line Covering 99.98 km. This line will feature substations at Rongai, Keringet, and Chemosit. 

Also lined up is the 132kV Menengai-Ol Kalou-Rumuruti Line. This line will span 89.88 km, featuring substations at Menengai, Ol Kalou, and Rumuruti. 

There is also a 400/220kV Substation at Lessos seen as essential for supporting the 400kV transmission network and enhancing regional power stability. 

At the same time lined up is the 132/33kV substation at Thurdibuoro aimed at expanding the local distribution grid to provide essential power to Central and Southern Nyanza regions. 

Wandayi also revealed that KETRACO is in discussions with a consortium including Africa 50 and Power Grid of India regarding additional projects. 

Gautam Adani, the founder of the Adani Group, has been embroiled in various controversies, including allegations of money laundering and corruption, prompting investigations by the Indian Supreme Court into the legitimacy of his wealth. Adani has denied these allegations, labelling them as attempts to destabilise his share prices.