Kenya has signed a new agreement to invest $311 million in building two high-voltage electricity transmission lines as part of its efforts to strengthen the national power grid. The deal brings together a pan-African infrastructure fund, Africa50, and PowerGrid Corporation of India. The finance ministry confirmed that the project will be developed under a public-private partnership model, reflecting the government’s growing reliance on private capital to fund large infrastructure projects.
The agreement comes at a time when Kenya is facing high public debt and limited fiscal space, making it difficult to rely on traditional government borrowing. To overcome these constraints, the government has increasingly turned to alternative financing methods such as public-private partnerships and the securitisation of selected revenue streams. Officials believe this approach will help sustain infrastructure development without adding immediate pressure to public finances.
Under the arrangement, Africa50, which is based in Morocco and owned largely by African states, will work with PowerGrid Corporation of India to design, finance, build, and operate the transmission lines and related substations. According to Africa50, the project company will be responsible for the full life cycle of the infrastructure, from construction to operation, over a concession period of 30 years. This long-term structure is expected to ensure stable operations and proper maintenance of the assets.
Kenya Electricity Transmission Company Limited, a state-owned utility, will act as the contracting authority for the project. The finance ministry said the new transmission lines are expected to improve grid stability, cut technical losses, reduce incidents of load shedding, and support the integration of renewable energy sources into the national grid. In recent years, demand-driven overloads have contributed to repeated power disruptions, including nationwide blackouts, highlighting the need for network expansion.
Although specific details on how much additional transmission capacity the project will deliver were not disclosed, officials said the new lines would help meet rising electricity demand without overstressing existing infrastructure. Africa50 stated that the project would make cleaner, more affordable, and more reliable power available to millions of Kenyans.
President William Ruto’s administration has actively promoted private sector participation in infrastructure development. However, critics argue that such deals can expose the government to hidden liabilities due to limited transparency. The government has dismissed these concerns, saying the partnerships are necessary under current financial conditions.
The new agreement follows the cancellation of a previous transmission project involving India’s Adani Group last year, after its founder faced legal action in the United States.
Subscribe to get the latest posts sent to your email.
){kind=link}
