The recent signing of Sh95.68 billion deal between Adani Energy Solutions and the Kenya Electricity Transmission Company has sparked interest from various stakeholders.
According to its proponents, the deal holds the promise of addressing Kenya’s frequent blackouts through the development of five substations and transmission lines. After four months of negotiation, the deal marks a significant step toward enhancing the country’s energy infrastructure.
While it is seen as a solution to the country’s persistent power woes, there are key questions and concerns that need to be addressed to ensure the deal is indeed beneficial.
One of the most notable aspects of the deal is that Adani will be responsible for raising all the necessary funds for the project through debt and equity, with the Kenyan government incurring no financial burden.
This move could be seen as a win for the government, allowing much-needed infrastructure development without increasing public debt. However, the 30-year management agreement in which Adani will oversee the transmission lines before handing the assets over to Ketraco, raises eyebrows.
A 30-year timeline is a significant period for any country, let alone for a nation with evolving energy demands. During this time, Adani will manage a critical part of Kenya’s energy infrastructure, which makes one wonder the kind of control the country will exercise over its own power grid. Will Kenya’s energy sector’s future be tied to the decisions of a foreign entity?
While Ketraco will ultimately gain control after three decades, the long-term consequences of this agreement are worth pondering. Moreover, concerns have been raised about the transparency of the deal.
The government has instructed Ketraco to publish the details of the agreement in two national dailies, which is a positive step in the right direction. Yet, for a project of this magnitude, the public needs more than just a broad outline of the deal. Full disclosure of the terms, conditions and financial structuring of this agreement should be made available for public scrutiny to ensure that it truly benefits the country.
Another key point in this deal is the role of local businesses. Energy Cabinet Secretary Opiyo Wandayi said the project would crystallise through a competitive bidding process to create business opportunities for local companies. The Kenyan public and local businesses deserve clear answers.
The government needs to assure the country that this is not just a giveaway to a foreign conglomerate, but a deal that will deliver tangible benefits in terms of job creation, skill transfer and energy reliability.
In addition, Adani Energy Solutions has faced scrutiny in other markets, particularly in India, where its environmental record and business practices have come under the spotlight. Ketraco claims that it conducted comprehensive due diligence on the company, but Kenyan stakeholders should remain vigilant.
As this deal progresses, regular updates and independent oversight will be crucial to ensure that all environmental and social standards are adhered to.
While the Ketraco-Adani deal presents an opportunity to improve Kenya’s energy infrastructure and resolve power blackouts, there are significant concerns that need to be addressed. A project of this magnitude requires utmost transparency and accountability.
The public deserves to understand the long-term impact of the deal as well as assurances that it will provide real benefits for the country and its people, rather than entrenching foreign control in critical natural infrastructure.
The government must ensure the
Adani deal delivers on its mandate
and Kenya’s energy future remains
in the hands of Kenyans.