Kenya has signed a $311 million agreement with pan-African infrastructure fund Africa50 and India’s PowerGrid Corporation to build two high-voltage electricity transmission lines, the finance ministry said on Monday.
The deal is part of Kenya’s push to fund infrastructure through public-private partnerships as high public debt and limited fiscal space restrict traditional financing options, Reuters reported.
Under the agreement, Africa50, a Morocco-based fund largely owned by African states, will partner with PowerGrid to design, finance, construct and operate the transmission lines and related substations.
Africa50 said the project company will “undertake the entire lifecycle of the transmission infrastructure, from construction to operation, over a 30-year concession period,” adding that the lines would “unlock cleaner, affordable, and more reliable power for millions of Kenyans.”
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Details on the investment breakdown and the expected increase in transmission capacity were not disclosed. Kenya Electricity Transmission Company Limited (KETRACO), a state-owned firm, will act as the contracting entity.
The finance ministry said the project would “enhance system stability, reduce technical losses and load shedding, and facilitate the integration of renewable energy.”
Kenya has previously suffered nationwide blackouts blamed on demand-driven overloads that strained the power grid. The government has sought to prevent such disruptions by expanding transmission infrastructure to accommodate rising demand.
However, Kenya’s debt burden and resistance to new tax increases have pushed President William Ruto to pursue private-sector partnerships, a strategy critics say exposes the state to additional liabilities through opaque contracts, a claim the government rejects.
An earlier plan by Ruto’s administration to develop new transmission lines with India’s Adani Group was cancelled last year after the group’s founder was indicted in the United States.
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Image Credit: Bloomberg
