Ruto now defends Sh95 billion Ketraco-Adani deal
Business
By
Julius Chepkwony and Sophia Matoya
| Oct 25, 2024
President William Ruto has defended the multi-billion-shilling power transmission projects awarded to the Adani Group under the Public-Private Partnership (PPP) framework, urging Kenyans to embrace such initiatives.
He emphasised that private sector financing would ease the tax burden and reduce dependence on loans.
Speaking in Nakuru Thursday during the ground-breaking ceremony of the 35-megawatt Orpower 22 Power Plant at the Menengai Geothermal site, Ruto lauded the Adani Group's investment in the project.
The Kenya Electricity Transmission Company Limited (Ketraco) and Adani Energy Solutions Limited signed a Sh95.7 billion agreement to operate and maintain transmission lines and substations for 30 years, in efforts to address persistent power blackouts across Kenya.
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"The Adani Group is investing Sh95 billion of its own money in the transmission line. Had we borrowed that money, it would have burdened the people of Kenya. This is now a private-sector investment, similar to the Nairobi Expressway's," Ruto said.
Accompanied by Energy Cabinet Secretary Opiyo Wandayi and Nakuru Governor Susan Kihika, the President noted that the country would repay the investment through a negotiated service charge.
Ruto further underscored the importance of private sector involvement in unlocking Kenya's potential and fully exploiting its resources. "It is crucial for us as a nation to understand that public-private partnerships provide a win-win situation where we deliver public services using private investment, supporting overall development," he added.
The 35MW Orpower 22 Power Plant is a PPP project by China's Kaishan Group, which has invested Sh12 billion. This marks the first time Kenya will have a transmission line connecting Menengai to Ol Kalou, Nanyuki, and Meru, among other areas.
Ruto said power purchase agreements create a synergy between public and private resources, unlocking opportunities. He referenced the Nairobi Expressway as an example, where private investors recoup their investment through toll collections.
Advocating for PPPs, Ruto noted that the approach prevents further burdening Kenyans with additional taxes or loans when private sector investment is available.
"The commencement of the Orpower Twenty-Two plant highlights our commitment to unlocking Kenya's vast geothermal potential to drive economic growth," Ruto said.
Kenya has so far tapped only 950MW of its estimated 10,000MW geothermal potential. Ruto urged the private sector to seize the opportunity, stressing the need for the Geothermal Development Corporation (GDC) to maintain high capacity in leading the country's energy transition.
"Geothermal projects are complex, but the GDC must ensure swift progress in Menengai and other projects by utilising local labour and technical skills to promote self-reliance and national pride," he said.
Dr Yan Tang, General Manager of Kaishan Group Company Limited, revealed plans to invest in additional projects, including generating green hydrogen from geothermal power and producing ammonia. "Kenya's agriculture will benefit from green ammonia, which can also replace diesel as a fuel, reducing carbon emissions and supporting Kenya's net-zero initiative," said Dr Tang.