Kenya Approves $907 Million Adani Energy Solutions Project for Transmission Lines and Substations Amid Public Controversy and Infrastructure Revamp

Kenya Approves $907 Million Adani Energy Solutions Project for Transmission Lines and Substations Amid Public Controversy and Infrastructure Revamp
Image credit: Adani Energy 

Kenya has approved a $907 million proposal from Adani Energy Solutions, the power distribution arm of India’s Adani Group, to build transmission lines and substations in the eastern and western parts of the country. This project aims to revamp Kenya’s aging distribution lines to reduce leakages and frequent outages.

Project Details: Transmission Lines and Substations Development

Adani Energy Solutions, which operates more than 21,000km of power distribution lines, will build 371km of lines and five substations under a Public-Private Partnership (PPP). This initiative is part of Kenya’s efforts to improve its power infrastructure.

Feasibility Study and Approval Timeline

“The project development or feasibility study report was completed, submitted, and approved in May 2024, for the project to progress to contract negotiations,” stated the Treasury in its draft Budget Policy Statement (BPS).

Kenya's Turn to PPPs Amid Rising Debt Concerns

Kenya has increasingly turned to PPPs for infrastructure projects as mounting debt has cut the government’s spending on new roads, power lines, railways, and airports. However, there are ongoing concerns about the opacity of the process and the inflated costs of some projects.

Public Controversy Over Adani Airport Holdings Deal

The approval comes amid public anger over another agreement with Adani Airport Holdings to renovate and operate Jomo Kenyatta International Airport (JKIA). Despite President William Ruto denying knowledge of the $1.85 billion JKIA concession, the Kenya Airports Authority (KAA) confirmed the deal, which grants Adani Group a 30-year concession of the country’s main airport.

Adani Group's Expansion Amid Fraud Allegations

Adani Group founder Gautam Adani, one of Asia’s richest men, has been keen to expand his infrastructure empire into new markets despite damaging corporate fraud allegations. In 2023, Hindenburg Research claimed that the company engaged in market manipulation and “brazen” fraud, allegations that Adani Group denied.

Adani's Stock Recovery and Recent Equity Sale

The fraud allegations caused Adani’s listed stocks to collapse after a $140 billion sell-off. However, the stocks have since recovered. On Monday, the company announced it raised $1 billion in an equity sale with bids from US investors, marking the first equity raise since the scandal.