Exit Adani, enter Africa50: KETRACO to sign Ksh.45B deal for two power lines

The Kenya Electricity Transmission Company (KETRACO) says it is in the advanced stages of negotiating a public-private partnership with pan-African infrastructure investor Africa50.

Amid financial constraints, the company appears to be turning to private investors to strengthen the power grid and cut technical losses. 

"Africa50 were the first to come into the country. The first time they brought an expression of interest was in 2018, so they have been here for the last seven years," said  KETRACO MD Dr Eng. John Mativo.

With a requirement of over 250 million dollars worth of new projects every year, and a government that is fast approaching its debt ceiling, KETRACO says the only way to deliver on its mandate is by tapping into the private sector for partnerships.

"Those are the reasons why we have to think about other ways because the demand is there, the population is increasing, investors are really looking upon us, Kenyans are demanding to have power for 365 days for every second. So, it's just a matter of balancing that. That’s why we are thinking of PPPs and asset monetization," the MD added.

Africa50 will construct two new transmission lines: a 400-kilovolt line from Lessos to Loosuk and a 220-kilovolt line from Kisumu to Musaga.

KETRACO and Africa50 have already agreed on a number of issues, such as the total cost of the project, which is about Ksh.45 billion, as well as the cost of the debt, which will come in at 7.25 per cent.

"Their return on equity offer is 16 per cent at the moment. KETRACO is trying to push them down to 14 per cent. But when you look at what is happening in India, they are close to 15.5 per cent. But we will try our best to negotiate and get Kenyans a better deal," Dr Mativo noted.

KETRACO says it is finalizing the ouster of Adani Energy Solutions.

"Adani also had a different project set. We are definitely finalizing the termination once we get the AG’s approval. But what I can say for now is that we have been discussing with various financiers like the World Bank to support us in getting transaction advisors to repackage the projects and hopefully go for tenders before June. So, that’s the target we are pushing," he said.