Kenya has signed a $311 million agreement with Africa50 and India’s Power Grid Corporation to construct two high-voltage electricity transmission lines under a public-private partnership.
The agreement, announced by the finance ministry, covers the design, financing, construction, operation, and maintenance of the transmission lines and related substations.
The deal brings together Africa50, a pan-African infrastructure investment platform, and India’s Power Grid Corporation, one of the world’s largest transmission utilities.
It will be implemented as a public-private partnership (PPP), with the Kenya Electricity Transmission Company (KETRACO) which is state-owned, will serve as the contracting authority for the project.
Structure of the agreement
Under the arrangement, Africa50 and Power Grid will jointly design, finance, construct, operate, and maintain the transmission lines and related substations.
Africa50 said the project company will manage the full lifecycle of the infrastructure, from construction through operation, under a 30-year concession.
The investment covers two transmission corridors. These are the 400-kilovolt Lessos–Loosuk line and the 220-kilovolt Kisumu–Musaga line. Associated substations are also included.
Details on the breakdown of the $311 million investment were not disclosed. The expected increase in transmission capacity was also not specified.
Focus on grid reliability and renewable integration
According to the Ministry of Finance, the project is intended to strengthen grid reliability in western and northern Kenya.
The government said the transmission lines will help reduce technical losses and power interruptions. They are also expected to support the integration of renewable energy sources, including geothermal and wind projects.
Kenya’s electricity grid has experienced disruptions in the past. High demand and limited transmission capacity have been cited by authorities as factors behind system overloads and nationwide blackouts.
The government has been expanding transmission infrastructure to accommodate rising electricity demand while reducing pressure on existing networks.
Rising use of public-private partnerships
Kenya has increasingly relied on public-private partnerships to fund infrastructure projects. The approach has been adopted amid high public debt levels and limited fiscal space.
Transmission infrastructure requires significant upfront capital. Government documents and sector data indicate that Kenya faces a multibillion-dollar funding gap for grid expansion and upgrades.
By using PPP structures, the government aims to mobilise private financing and technical expertise. The model also shifts construction and operational responsibilities to private partners.
The Ministry of Finance stated that the agreement aligns with national plans for power development and transmission expansion.
Project development timeline
The transmission project was not newly initiated. It originated as a private initiative under Kenya’s PPP framework and progressed through regulatory and government approval processes.
Africa50 proposed the project under the private initiative model. It subsequently received approvals from relevant authorities, including PPP institutions and legal offices, before reaching the implementation stage.
Africa50 is owned primarily by African governments and institutions, including the African Development Bank. It focuses on developing and financing infrastructure projects across the continent.
The agreement follows the cancellation of a previous power transmission project involving India’s Adani Group.
The project, valued at about $736 million, was halted last year after legal and transparency concerns were raised. The cancellation followed the indictment of the group’s founder in the United States.
A Kenyan court also froze parts of the Adani-linked project, citing issues related to public participation and procurement processes.
The government later stated that it would pursue alternative arrangements for expanding transmission infrastructure.
What next
The project will be implemented under a 30-year concession, with the project company responsible for construction, operation, and maintenance of the transmission lines and associated substations.
KETRACO will act as the contracting authority for the project under Kenya’s public-private partnership framework.
The transmission lines will be developed as part of Kenya’s ongoing power grid expansion programme.
