Kenya seals $311 million power transmission lines deal with Africa fund, Indian firm

NAIROBI, Kenya — Kenya has signed a $311 million agreement with pan-African infrastructure fund Africa50 and PowerGrid Corporation of India to design, finance, build and operate two high-voltage electricity transmission lines under a public-private partnership, the finance ministry said Monday.

The deal marks one of the East African nation’s largest power-grid concessions to date and is intended to ease chronic constraints on the network as demand grows. The project company will manage the full life cycle of the assets — including associated substations — over a 30-year concession, Africa50 said in a statement.

Kenya Electricity Transmission Company Limited (KETRACO), the state transmission utility, will be the contracting entity. The ministry said the project will enhance system stability, cut technical losses and load shedding, and enable greater integration of renewable energy into the grid — core aims in a country where hydropower and geothermal already dominate the generation mix.

In recent years, high demand-driven overloads have been blamed for triggering nationwide blackouts, underscoring bottlenecks in the transmission backbone even as new generation has come online. “The two lines would unlock cleaner, affordable, and more reliable power for millions of Kenyans,” Africa50 said.

The ministry did not disclose the breakdown of the $311 million investment, nor how much additional transmission capacity the new lines will provide. PowerGrid, India’s state-run grid operator with extensive experience in high-voltage networks, will partner with Africa50 to deliver the project.

The financing model reflects Kenya’s broader pivot toward public-private partnerships and securitization of revenue streams to fund infrastructure amid high public debt and constrained fiscal space. President William Ruto’s administration has pitched PPPs as a way to accelerate delivery while preserving limited budget headroom.

Critics counter that long-term concessions can create contingent liabilities for the state and that opaque contracting raises governance risks. The government has rejected those concerns, casting private capital as essential to expand infrastructure without straining the exchequer. An earlier attempt to build transmission lines with India’s Adani Group was canceled last year after its founder was indicted in the United States.

Kenya’s grid strategy has twin objectives: keeping pace with surging urban and industrial demand while hardening the system to reduce outages and accommodate more variable renewable power. The ministry said the new lines are expected to help address both by expanding carrying capacity and improving reliability in areas prone to congestion.

Africa50, based in Morocco and majority-owned by African states and multilateral institutions, has ramped up investments in transmission as countries seek to close infrastructure gaps without relying solely on public borrowing. For Nairobi, the partnership with Africa50 and PowerGrid offers external capital and operational expertise that officials hope will speed completion and de-risk delivery.

Key contractual details — including tariff structures, risk sharing and performance benchmarks over the 30-year term — were not immediately made public. KETRACO will retain its role overseeing the national transmission system.

The project timeline and construction start date were also not disclosed.

By Ali Musa
Axadle Times international–Monitoring.