Fiona Nanna, ForeMedia News

6 minutes read. Updated 2:01AM GMT Thurs, 8August, 2024

Investment relations between Kenya and India are set to strengthen with the recent approval of a significant power line project worth Sh158 billion. This development marks a pivotal moment in Kenya’s infrastructure landscape and underscores a growing partnership between the two nations.

The Kenyan Treasury has greenlit the ambitious project, which will utilize the public-private partnership (PPP) model to oversee the construction of vital transmission lines and substations in Kenya’s eastern and western regions. The project also involves Africa50, a continental organization formed by African governments and the African Development Bank, dedicated to bridging Africa’s infrastructure funding gap by mobilizing both public and private sector finance and facilitating project development across the continent.

In this joint venture, Adani Energy Solutions, a key subsidiary of India’s Adani Group, is poised to invest Sh117 billion. This investment will facilitate the construction of a 206-kilometer 400 kV transmission line and a 95-kilometer 220 kV line. Africa50 will contribute Sh41 billion to the project, focusing on the development of a 177-kilometer 400 kV line and a 64-kilometer 132/33 kV line.

The project’s feasibility study was completed and approved in May 2024, as confirmed by Kenya’s National Treasury in its draft Budget Policy Statement (BPS) for the year. This approval paves the way for the transition from project development to contract negotiations.

The approval of this power line project follows closely on the heels of another significant proposal by Adani Airport Holdings Limited (AAHL), also a branch of the Adani Group. AAHL has proposed an investment of Sh238 billion (approximately USD 1.84 billion) for the expansion and operation of Jomo Kenyatta International Airport (JKIA). This proposal, however, has sparked considerable public debate regarding the transparency of the tender process and concerns about potential implications for Kenya’s national carrier.

Under the terms of the deal, the Kenyan government will grant concessions to Adani to finance, construct, and operate the airport infrastructure for a period of 30 years, subsequently awarding the company an equity stake in perpetuity. This approach reflects the government’s shift towards PPPs to manage infrastructure projects amidst increasing fiscal constraints.

However, Foreign Affairs Cabinet Secretary Musalia Mudavadi has recently clarified that no agreements have yet been finalized with Adani Airports Holdings Limited regarding the JKIA upgrade. He emphasized that the proposal remains under review and negotiation, with all terms and conditions subject to the provisions of the PPP Act. Mudavadi assured that appropriate safeguards would be implemented to ensure that Kenya’s national interests are upheld and that the private party remains accountable for its obligations.

The growing collaboration between Kenya and India, exemplified by these significant projects, underscores a broader trend of increasing foreign investment and infrastructure development in Kenya. However, it also highlights ongoing concerns about the management and transparency of such large-scale projects.

Focus Keywords:

  • Adani Energy Solutions
  • Kenya power line project
  • Africa50 infrastructure investment
  • India-Kenya investment relations