Two firms eye substation, power transmission deals
Workers connect high-voltage power lines. The two firms, Africa 50 and Adani Energy Solutions Limited, are proposing to put up 625km of high-voltage power lines.
What you need to know:
- Africa 50 and Adani Energy Solutions are proposing to put up 237km and 388km of high-voltage power lines, respectively.
- The two projects are estimated to cost $1, 220.25 million cumulatively, said the Treasury in the Draft 2024 Budget Policy Statement.
Two private companies have lined up power transmission line and substation projects worth Sh187.1 billion under Public Private Partnership (PPP) agreements with the government, raising hopes of improving the country’s shaky grid that has been blamed for frequent power outages.
Disclosures by the National Treasury show that Africa 50 and Adani Energy Solutions Limited are proposing to put up 237km and 388km of high-voltage power lines, respectively.
Adani is also lining up three substations in Thurdibuoro in Kisumu County, Lessos, and Rongai.
The projects have been presented by the two companies as Privately-Initiated Proposals (PIPs) — an arrangement provided for under PPP Act which allows the government to benefit from the knowledge and innovative ideas of the private sector.
Energy Cabinet Secretary Davis Chirchir recently said the government would be leaning on the private sector to put up power transmission lines on a PPP model to help the State bridge an investment lag in the critical infrastructure that he blamed for the power blackouts.
“There are two projects under PIPs to support electricity transmission lines currently under project development phase – Africa 50 covering 165km-400 Kilovolts (KV) along Losuk – Lessos; Kisumu – Musaga 72km-220KV. The project is estimated to cost $313.25 million,” said the Treasury in the Draft 2024 Budget Policy Statement.
“Adani Energy Solutions Ltd planning to do 197km-400KV along Gilgil – Thika – Mala – Konza; 101km-220KV along Rongai – Keringut Chemosit; 90km – 132KV along Menengai – Olkalau – Rumuruti; 400/220KV sub stations at Lessos and Rongai; and 132/33KV Thurdibuoro substation. Estimated cost $907 million.”
Adani Energy Solutions is India’s largest private transmission company and is part of the Adani Group, which is owned by the country’s second wealthiest person Gautam Adani.
Africa 50, on its part, was established by the African Development Bank (AfDB) to facilitate development and financing of medium- to large-scale projects on the continent. Its investor base is currently composed of the AfDB, two central banks, and 31 African countries, including Kenya.
Under the PPP law, evaluations after the project development phase can either result in a project being set aside, awarded to the proposer or being subjected to open tender.
Earlier this year, MPs had called on the government to use the PPP model to construct the high-voltage power lines to ease pressure on the Exchequer, which has faced limited debt headroom to fund such capital-intensive projects.
The new lines, according to the energy ministry, will be key in improving load capacity in areas – particularly in the Western region—where the number of connections has gone up over the last eight years without a commensurate increase in high voltage transmission capacity to evacuate enough power to the end users.
