Kenya’s Sh96 billion energy deal with Adani raises concerns over costs. Ketraco estimated the projects at Sh61.2 billion, but Adani’s proposal is Sh33.5 billion higher.
Why the big difference? Kenya’s Sh96 billion energy deal with Adani is raising significant concerns over costs and transparency.
The project aims to build 3 transmission lines and 2 substations, but the cost estimates have raised eyebrows.
Kenya’s Sh96 billion energy deal with Adani is raising significant concerns over costs and transparency.
The project aims to build 3 transmission lines and 2 substations, but the cost estimates have raised eyebrows.
Ketraco estimated the total cost for the five projects at Sh61.2 billion.
However, Adani’s proposed cost is Sh33.5 billion higher, bringing the total to Sh96 billion. Why the big difference?
Now, the government signed a 30-year public-private partnership (PPP) deal with Adani Energy Solutions, allowing the Indian company to build and operate the projects before handing them back to Kenya.
Ketraco’s cost estimates for the projects are broken down as follows:
- Gigil-Thika-Malaa line: Sh33.8 billion
- Rongai-Kerenget-Chemosit: Sh12.8 billion
- Menengai-Ol Kalu-Rumuruti: Sh4.4 billion
- Construction of Thurdiboro substation: Sh3.5 billion
- Rongai substation: Sh2.4 billion
- Lessos substation: Sh4.1 billion
Ketraco’s estimates also highlight that Adani’s costs are about 12% higher than expected, leading to concerns about possible inflation and overpricing.
Energy and Petroleum CS Opiyo Wandayi has defended the PPP model, stating it will help stabilize Kenya’s power supply, which has faced challenges with increased blackouts due to ageing infrastructure. However, skepticism remains about this approach.
Past infrastructure deals in Kenya have faced scrutiny due to delays and cost overruns, leading critics to question the transparency of this new deal.
Will this partnership serve the public interest or lead to more debt?
The financial implications of the deal are significant.
The government must ensure costs do not spiral out of control and that benefits reach the citizens. Public trust hinges on transparency and effective governance.
As the project progresses, scrutiny will remain on the government’s handling of this deal, especially with the Sh33.5 billion difference in estimates.
