NAIROBI, Kenya – The Kenya Electricity Transmission Company (KETRACO) is in the advanced stages of negotiating a public-private partnership (PPP) with Africa50, a pan-African infrastructure investor, in a move to boost the country’s power grid.
The deal, valued at Ksh.45 billion, will fund the construction of two major transmission lines: a 400-kilovolt line from Lessos to Loosuk and a 220-kilovolt line from Kisumu to Musaga.
This development comes months after KETRACO parted ways with Adani Energy Solutions, signaling a shift in strategy amid financial constraints.
With the government facing debt limitations and an ever-growing demand for reliable electricity, KETRACO is increasingly turning to private investors to fund key infrastructure projects.
“We need over 250 million dollars worth of new projects every year, yet the government is fast approaching its debt ceiling. The demand for power is increasing, and Kenyans expect a reliable supply 24/7. That’s why we are thinking about PPPs and asset monetization,” said KETRACO Managing Director Dr. Eng. John Mativo.
According to Mativo, Africa50 first expressed interest in the Kenyan market in 2018, making it a familiar player in the energy sector.
KETRACO and Africa50 have already agreed on key financial aspects of the partnership, including the cost of debt, which has been set at 7.25%.
However, negotiations are still ongoing over Africa50’s return on equity, currently proposed at 16%.
“We are pushing them to lower it to 14%, but when you compare with markets like India, they are at about 15.5%. We will do our best to negotiate a better deal for Kenyans,” Mativo noted.
Meanwhile, KETRACO is finalizing the termination of its contract with Adani Energy Solutions.
The state-owned firm is awaiting approval from the Attorney General (AG) to complete the process.
“Adani had a different project set, and we are wrapping up the termination. We are also in talks with financiers like the World Bank to help us repackage these projects and hopefully go to tender before June,” Mativo added.
