Kenya has inked a $311 million power lines deal with a pan-African infrastructure fund and PowerGrid Corporation of India. The Kenya Power Lines Deal agreement is on the investment on the construction of two high-voltage electricity transmission lines. The East African nation has turned to public-private partnerships and securitization of some revenue streams.

The aim is to provide funds for infrastructure projects in the face of high public debt and tight fiscal space. Under the power lines deal, Africa50 will join forces with PowerGrid in implementing the project. Their scope entails the design, financing, and construction of the power line. Furthermore, it includes operating the line over a 30-year concession period.

Africa50 is a Morocco-based infrastructure fund that is mainly owned by African states. In their statement, Africa50 noted that the two lines would “unlock cleaner, affordable, and more reliable power for millions of Kenyans.” However, the breakdown of investment, and the expected boost to transmission capacity, were unclear.

Implementation Scope on the Kenya Power Lines Deal

The $311 million Kenya power lines deal will see the Kenya Electricity Transmission Company Limited (KETRACO) act as the contracting entity. Once complete, the project is expected to enhance system stability as well as reduce technical losses and load shedding. Furthermore, it will facilitate integration of renewable energy, according to the finance ministry. High demand-driven overloads have been blamed for tripping up the electricity grid in the past. These has led to various problems such as the occurrence of nationwide blackouts. The government has sought to address that by expanding infrastructure to accommodate demand increases without straining the network. However, Kenya’s debt burden and resistance to new tax hikes has closed off traditional source of financing for such infrastructure. This has resorted to President William Ruto crafting deals with the private sector in response. Critics say that strategy exposes the state to additional liabilities through opaque contracts. However, the government has rejected the criticism. An earlier attempt by Ruto’s government to build new power transmission lines with India’s Adani Group was cancelled last year after its founder was indicted in the United States.

Similar Projects

As Kenya seeks to improve its electricity connectivity, the country has embarked on a number of projects to make this a reality l. Such projects include the Last Mile Connectivity Project and the Lamu-Suswa Power Line Project.

Kenya Power Lines Deal Factsheet

Key Partners

• Contracting Organization: Kenya Electricity Transmission Company (KETRACO)
• Investors / Developers: Africa50 and PowerGrid Corporation of India.
• Africa50: Pan-African infrastructure investment in Morocco.

Project Scope

• Africa50 and PowerGrid: Design, financing, construction, and operation.
• 30-year concession period
• Electricity infrastructure of high voltages.

Investment Value

• Total Project Cost: $311 million
• Funding division: Not released.

Objectives

• Enhance the grid stability and reliability.
• Minimize technical losses and load shedding.
• Favor use of renewable energy.
• Increase capacity to satisfy the increase in demand.

Strategic context

• Some of the transition of Kenya to PPPs owing to high national debt.
• Intended to open up infrastructure financing alternatives to conventional state financing.
• Past transmission deal with Adani Group cancelled in 2024.

Expected Impact

• Better power supply to millions of people.
• Less vulnerability to national-wide blackouts.
• Enhanced national electricity system