Kenya on Monday signed an agreement for the investment of $311 million (Sh40.2 billion) in the construction of two high-voltage electricity transmission lines with a pan-African infrastructure fund and PowerGrid Corporation of India, the finance ministry said.
The East African nation has turned to public-private partnerships, and securitisation of some revenue streams, to provide funds for infrastructure projects in the face of high public debt and tight fiscal space.
Under the power lines deal, Africa50, a Morocco-based infrastructure fund that is mainly owned by African states, will join forces with PowerGrid to design, finance, construct and operate the transmission lines and associated sub-stations, the ministry said.
The project company will "undertake the entire lifecycle of the transmission infrastructure, from construction to operation—over a 30-year concession period", Africa50 said in a statement.
The two lines would "unlock cleaner, affordable, and more reliable power for millions of Kenyans," it said.
The breakdown of investment, and the expected boost to transmission capacity, were unclear.
Kenya Electricity Transmission Company Limited (KETRACO), a state firm, will be the contracting entity.
The project would "enhance system stability, reduce technical losses and load shedding, and facilitate the integration of renewable energy," the finance ministry said.
High demand-driven overloads have been blamed for tripping up the electricity grid in the past, leading to nationwide blackouts. The government has sought to address that by expanding infrastructure to accommodate demand increases without straining the network.
However, Kenya's debt burden and resistance to new tax hikes has closed off traditional sources of financing for such infrastructure, and President William Ruto has responded by crafting deals with the private sector.
Critics say that strategy exposes the state to additional liabilities through opaque contracts. The government has rejected the criticism.
An earlier attempt by Ruto's government to build new power transmission lines with India's Adani Group was cancelled last year after its founder was indicted in the United States.
