Adani deals good for you, president Ruto tell Kenyans, defend Sh95.7billion Adani-Ketraco 30-years pact

For the first time, amidst the growing public discontent over shadowy multibillion government contracts awarded to the controversial subsidiaries of Indian conglomerate, Adani Group through Public Private Partnership (PPP) arrangement majorly in the health, public and energy sectors, president William Ruto has publicly declared his support to the Adani’s.

Today, while speaking in Nakuru during the ground-breaking ceremony of the 35-megawatt Orpower 22 Power Plant at the Menengai Geothermal site, president Ruto has defended the 30 years Sh95.7billion power transmission projects awarded to Adani Energy Solutions Limited (AESL), a subsidiary of Adani Group, under the PPP framework, urging Kenyans to embrace such initiatives.

The contract was signed between AESL and the Kenya Electricity Transmission Company (KETRACO) overseen by Energy Cabinet Secretary Opiyo Wandayi.

President Ruto emphasised that private sector financing would ease the tax burden and reduce dependence on loans.

“The Adani Group are investing Sh95billion of their money in the transmission line. We would have otherwise gone to borrow that money and burden the people of Kenya. This is now a private-sector investment, similar to the Nairobi Expressway’s.” The president noted.

Ketraco and AESL signed the agreement to operate and maintain transmission lines and substations for 30 years, in efforts to address persistent power blackouts across Kenya.

The president was accompanied by Energy Cabinet Secretary Opiyo Wandayi and Nakuru governor Susan Kihika.

President Ruto noted that the country would repay the investment through a negotiated service charge.

Ruto further underscored the importance of private sector involvement in unlocking Kenya’s potential and fully exploiting its resources.

“It is crucial for us as a nation to understand that public-private partnerships provide a win-win situation where we deliver public services using private investment, supporting overall development.” He added.

The 35MW Orpower 22 Power Plant is a PPP project by China’s Kaishan Group, which has invested Sh12 billion. This marks the first time Kenya will have a transmission line connecting Menengai to Ol Kalou, Nanyuki, and Meru, among other areas.

Ruto said power purchase agreements create a synergy between public and private resources, unlocking opportunities.

He referenced the Nairobi Expressway as an example, where private investors recoup their investment through toll collections.

While drumming up support for PPPs, Ruto noted that the approach prevents further burdening Kenyans with additional taxes or loans when private sector investment is available.

“The commencement of the Orpower Twenty-Two plant highlights our commitment to unlocking Kenya’s vast geothermal potential to drive economic growth.” President Ruto said.

Kenya has so far tapped only 950MW of its estimated 10,000MW geothermal potential.

Ruto urged the private sector to seize the opportunity, stressing the need for the Geothermal Development Corporation (GDC) to maintain high capacity in leading the country’s energy transition.

“Geothermal projects are complex, but the GDC must ensure swift progress in Menengai and other projects by utilising local labour and technical skills to promote self-reliance and national pride.” Dr Yan Tang, General Manager of Kaishan Group Company Limited said.

Tang revealed plans to invest in additional projects, including generating green hydrogen from geothermal power and producing ammonia.

“Kenya’s agriculture will benefit from green ammonia, which can also replace diesel as a fuel, reducing carbon emissions and supporting Kenya’s net-zero initiative.” Tang added.

The three decades long Sh95.7billion between Ketraco and subsidiary of Adani Group, AESL, marks the first successful attempt by the Indian firm to enter the country, following the now-suspended push to secure a concession lease to expand and operate Jomo Kenyatta International Airport (JKIA) for 30 years.

But the deal with Adani Energy Solutions has been marred by concerns over how the public participation was conducted, with a city-based law firm unsuccessfully pushing to have names of other firms that bid alongside Adani Group made public.

The law firm, IC Law LLP also wanted Ketraco to make public details on the financial health of the Adani energy subsidiary, findings of recommendations from public participation over the deal, and also the legal advice that the office of the Attorney-General gave Ketraco on the deal.

Besides the deal with Adani, Ketraco is also in an advanced stage of inking a PPP agreement with Africa50 to build the 400kV line from the Loosuk-Lessos line spanning 177km and the 64km 220kV Kisumu-Musaga transmission line.

Africa50 is owned by the African Development Bank and African governments that are members of the Pan-African lender.

While signing the contract mid this month, CS Wandayi added that four other lines, each with a capacity of 132kV and substations lined under the PPP model, are the Kisumu-Bondo-Rangala-Nyaga line, the Meru-Mau 132Kv line, Githambo-Othaya-Kiganjo line and Kitale-Tongaren-Webuye-Musaga lines.