Adani’s Ksh.95 billion 30-year contract for Kenya’s power lines
It’s been four months of negotiations, with Kenyan government after a signed power supply agreement with Adani Energy Solutions, whose subsidiary is part and parcel of the larger Adani Energy Group, last week. The deal will involve the development and maintenance of transmission lines and substations. centers across Kenya.
During its 30-year operation, Adani will be responsible for operating the transmission lines and stations it constructs, after which KETRACO will take over the project and all its assets in good faith Indian company is to pay the government a Ksh 1 billion ($8 million) take over fee under the contract.
Adani is planning to extend the 208.73 km long Gilgil 400 kiloVolt transmission line to Konza via Thika and Malaa and have new facilities at Gilgil,
Inside Adani’s Ksh.95 billion, 30-year deal for Kenya’s power lines
Dennis Musau
By Dennis Musau
Published on: October 15, 2024 11:52 (EAT)
Inside Adani’s Ksh.95 billion, 30-year deal for Kenya’s power lines
Chairperson of Indian conglomerate Adani Group, Gautam Adani, in Mumbai on November 19, 2022. (Photo by AFP)
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By Dennis Musau,Oct 15th 2024 11:52 AM
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After four months of negotiations, the Kenyan government last week signed a Ksh.95 billion ($736 million) power transmission deal with Adani Energy Solutions – an Adani Group subsidiary – to develop and maintain key transmission lines and substations across the country.
Adani will manage the transmission lines and substations it will construct for 30 years, after which the project and all its assets will be handed over to the Kenya Electricity Transmission Company Limited (KETRACO) “in good condition and free of any encumbrances.”
Citizen Digital has established that the Indian company will pay the government a Ksh.1 billion ($8 million) success fee under the deal.
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A success fee is a compensation paid to an advisor, often an investment bank, for successfully closing a deal.
Details of the Public-private Partnership agreement (PPP) shared by KETRACO show Adani Energy Solutions agreed to pay the Kenyan government a success fee of one per cent of the total project’s cost.
Twenty-four months
Under the transmission-by-operation scheme, Adani plans to develop the 400 kV Gilgil transmission line from Thika and Mala to Kunza to extend 208.73 km and build new sub-divisions in Gilgil. Thika and Mala.
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Second line 220kV from Rongai to Keringet and Chemosit covers 99.98 km , with new stations in Rongai, Keringet and Chemosit.
The third 132kV transmission line will be built from Menengai via Ol Kalu to Romuruti, which will be 89.89 km long. A new post will be created in this column.
The Indian company is also considering setting up a 132.33 kV substation at Thurdiburo county of Kisumu.
Adani will complete the projects within 24 months from the date of contract. This is according to KETRACO.
“If the projects are not completed on time, KETRACO will implement job security or terminate the contract,” the parastatal said.
Company is expected to finance the project from debt and equity with a 70:30 ratio. According to Energy Minister Opiyo Wandai, the Kenyan government will not pay any money related to the project.
In addition, Adani must maintain a competitive bidding process that creates more business opportunities for Kenyans..
According to KETRACO, all people affected by the project will be compensated for the loss of their property, including damage of crops and trees.
“They will compensate based on the market value for the small loss of land use for parcels affected by transmission lines,” the NGO said.
“Payment must be made in full, promptly and fairly, and all persons displaced by the project must remain.”
Despite concerns about public participation in the contract following Adani Energy Solutions’ bid, the government believes it has done its due diligence..Currently, Adani Energy Solutions is negotiating a $900 million (about Ksh 116 billion) contract to upgrade Tanzania’s power grid. A senior official familiar with the matter revealed last week that the Indian company wants to build a high-voltage power line through a public-private partnership with southern Kenya..
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