Kenya is seeking new funding strategies to boost its electricity infrastructure after the collapse of a Sh96 billion deal with India’s Adani Energy Solutions, Energy Cabinet Secretary Opiyo Wandayi has said.

Speaking at a press briefing ahead of the Eastern Africa Power Pool (EAPP) Regional Trade Conference, Wandayi outlined plans to leverage Public-Private Partnerships (PPPs) and support from development partners to strengthen the country’s power grid.

The move follows President William Ruto’s decision to cancel Adani Group’s ambitious projects in Kenya, including the modernization of the Jomo Kenyatta International Airport and a transmission line deal with the Kenya Electricity Transmission Company (Ketraco).

The terminated deal would have seen Adani build and operate key power transmission lines and substations for 30 years, aimed at tackling persistent blackouts and improving Kenya’s energy capacity.

Despite the setback, Wandayi emphasized the need to move forward with plans to enhance energy production and distribution.

“One of the focus areas since I was sworn in has been the quality of our energy infrastructure,” he said. “We are working with relevant partners to address the gaps, especially in generation, distribution, and transmission.”

Adani Deal Fallout

The Adani agreement had been touted as a transformative solution to Kenya’s energy challenges, covering critical transmission lines such as the 208-kilometer Gilgil-Thika-Malaa-Konza line and two advanced substations, including the 400/220kV Lessos facility.

However, in his November State of the Nation address, President Ruto directed its termination, citing strategic national interests.

Wandayi remained noncommittal on whether the cancellation had been formalized but insisted that Kenya must look beyond the deal to address its energy needs.

Turning to Public-Private Partnerships

In light of the challenges, the government has identified PPPs as a key avenue for mobilizing resources. Wandayi explained that PPPs offer a sustainable way to attract investment into the energy sector, which is crucial as Kenya prepares to participate in the regional power trade under the Eastern Africa Power Pool framework.

Set to launch next year, the EAPP will enable 13 member states to share energy resources and trade electricity across borders. Kenya, as a key player, must upgrade its infrastructure to meet the increased demand for energy and ensure stable power distribution.

“We shall continue to explore PPPs in strengthening and improving our power infrastructure,” Wandayi affirmed, pointing to partnerships as the backbone of the ministry’s strategy.

Development Partners Step In

Kenya also plans to capitalize on the support of international development partners with a vested interest in the country’s energy sector. Key collaborators include Power Africa, a US-led initiative that provides financing and technical assistance, as well as institutions like the African Development Bank (AfDB), World Bank, and Japan International Cooperation Agency (JICA).

These organizations have supported Kenya’s energy projects through funding, grants, and technical expertise.

Lifting the Moratorium on Power Purchase Agreements

Beyond funding, the Energy Ministry is working to lift the moratorium on Power Purchase Agreements (PPAs) imposed in 2021 by former President Uhuru Kenyatta.

The freeze was aimed at vetting Independent Power Producers and reviewing existing PPAs to control rising power bills.

Although the Cabinet lifted the moratorium in early 2023, Parliament blocked the move, citing unresolved issues with energy costs. Wandayi revealed that discussions with the National Assembly are ongoing to reverse the freeze, enabling the country to enter into new agreements to increase energy generation capacity.

“We are in constant consultation with the National Assembly through the departmental committee on energy,” Wandayi said. “Lifting the moratorium will allow us to explore new opportunities for expanding our energy grid.”

A Vision for the Future

Despite the challenges posed by the Adani deal’s collapse, Kenya’s energy sector is gearing up for transformation. With PPPs, development partnerships, and strategic reforms, the country aims to secure a stable and efficient power supply to meet growing demands, both domestically and regionally.

As the EAPP Regional Trade Conference kicks off in Mombasa next week, all eyes will be on Kenya’s next steps in navigating its energy future.

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