Kenya has given the green light to a substantial $907 million project proposal from Adani Energy Solutions, the power distribution subsidiary of the Indian conglomerate Adani Group. The project involves the construction of transmission lines and substations in the Eastern and Western regions of Kenya.
Adani Energy Solutions, which boasts an extensive network of over 21,000km of power distribution lines, is set to construct 371km of new lines and establish five substations under a Public-Private Partnership (PPP) model. This development comes amidst public discontent regarding a separate agreement involving Adani Airport Holdings, which is poised to renovate and manage the Jomo Kenyatta International Airport (JKIA).
The Treasury disclosed in its draft Budget Policy Statement (BPS) that the project’s development and feasibility study report was completed, submitted, and approved in May 2024, paving the way for the project to advance to the contract negotiation phase.
The Adani power transmission initiative is a strategic component of Kenya’s broader efforts to modernize its aging distribution infrastructure, aiming to curb energy losses and frequent power disruptions.
Facing escalating debt, Kenya has increasingly relied on PPPs to finance critical infrastructure projects, including new roads, power lines, railways, and airports. Nonetheless, the transparency of these partnerships and concerns over the inflated costs of certain projects have remained points of contention.
In a notable incident, President William Ruto denied being aware of the $1.85 billion JKIA concession, only for the Kenya Airports Authority (KAA) to confirm the deal through an advertisement in local newspapers. Despite public opposition, the agreement granting Adani Group’s hospitality division a 30-year concession of Kenya’s principal airport has not been retracted.
Gautam Adani, the founder of Adani Group and one of Asia’s wealthiest individuals, has expressed a desire to extend his infrastructure empire into new markets, particularly as allegations of corporate misconduct have begun to subside. In 2023, Hindenburg Research accused the conglomerate of market manipulation and egregious fraud, allegations that the company has vehemently denied. These claims led to a dramatic $140 billion sell-off of Adani’s listed stocks, although the company’s shares have since made a recovery.
Recently, Adani announced a successful $1 billion equity sale, marking the first such endeavor since the scandal, with participation from US investors. This move indicates a resurgence of investor confidence in the company’s prospects.
