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Wandayi defends Adani Group's Sh94 billion energy deal

National

By Benjamin Imende | Sep 17, 2024

**Energy Cabinet Secretary Opiyo Wandayi highlighted the necessity of embracing private investors due to Kenya’s limited fiscal space for taking on new loans.** [File, Standard]

Energy Cabinet Secretary (CS) Opiyo Wandayi has defended Adani, a company eyeing a Sh94 billion deal from the Kenyan government in the energy sector.

This comes amid controversy surrounding Adani’s previously secured 30-year lease of Jomo Kenyatta International Airport, a Sh238 billion agreement halted by the High Court after legal challenges from the Law Society of Kenya and the Kenya Human Rights Commission.

Speaking at a public participation event at the KAWI Complex in Nairobi, Wandayi emphasised the importance of Public-Private Partnerships (PPPs) in Kenya’s development strategy, saying that they will help the country overcome financial challenges.

“If structured properly, PPPs allow us to achieve value for money. Only those projects that pass rigorous screening and suitability tests will be developed through this model,” Wandayi told stakeholders and the media.

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The former ODM minority leader said that Adani Energy Solution Limited, which has built over 21,000 kilometers of transmission lines and boasts a transformer capacity of 61,000 megawatts, plans to enhance Kenya’s energy infrastructure with additional projects. These include a 222 kilometre 400 kV Gilgil-Thika-Malaa-Konza transmission line, along with substations in Rongai and a 99 kilometre 220 kV Rongai-Keringet-Chemosit transmission line.

The company also intends to develop a 132 kV Menengai-Ol Kalou-Rumuruti transmission line, covering approximately 98 kilometr, and a 132/33 kV substation in Thurdibuoro.

In addition to Adani, other major players, including Africa50 and the government-owned PowerGrid India, are also competing for the lucrative energy connectivity contract.

“The projects are required to be completed between 2026 and 2027, as per the Kenya Electricity Transmission Company’s (KETRACO) Master Plan and the Least Cost Power Development Plan,” said Wandayi.

Wandayi highlighted the necessity of embracing private investors due to Kenya’s limited fiscal space for taking on new loans.

“To foster development, we must collaborate with private partners like Adani, who have proposed taking on these billion-shilling projects. They own more energy infrastructure than Kenya, Uganda, and Tanzania combined,” he said, noting that Adani serves over 13 million consumer meters in Mumbai and the industrial hub of Mundra SEZ.

The CS further stressed that these projects align with KETRACO's goals to improve grid stability and efficiency. “Traditional financing methods are no longer sufficient. We must think beyond them to address challenges such as inadequate transmission capacity, insufficient renewable energy evacuation, and system reliability issues,” Wandayi added.

The deal with Adani is at the Draft Project Agreement stage,, which involves financial risk assessments and project approvals.

KETRACO Managing Director Dr Eng John Mativo stated that the company has completed four stages of the process for Adani, Africa50, and PowerGrid India’s proposals.

“Negotiations and drafting of the Project Agreement are currently underway,” said Mativo, explaining that KETRACO has been reliant on Development Finance Institutions (DFIs) and the government since 2008 to build transmission lines.