New Ketraco power projects spark tendering transparency concerns

Ketraco technicians repair one of the six electricity towers that was vandalized along the Olkaria-Lessos-Kisumu powerline, in Kayole estate, Naivasha. [File, Standard]

The Kenya Kwanza Government faces a fresh transparency challenge over new multibillion-shilling power transmission projects, as regulators seek limited public input months after the cancellation of a controversial $736 million (Sh94.9 billion) deal with India’s Adani Group.

The Energy and Petroleum Regulatory Authority (EPRA) on Wednesday called for public input on two new multibillion-shilling transmission lines to be developed under a public-private partnership (PPP) between state-owned Kenya Electricity Transmission Company (Ketraco) and a consortium of Africa 50 and Power Grid of India. Power Grid is 51 per cent owned by the government of India while Africa50 was founded by the African Development Bank (AfDB), which is also the anchor shareholder. 

In a public notice published in local dailies, Epra announced it would hold consultative forums in Kisumu and Eldoret in the next two weeks and invited written comments within the same timeline (October 14).

However, the notice listed only these two venues across the entire country for the public participation drive, a process mandated by the Constitution to ensure citizen involvement.

The projects include a 400kV line from Loosuk to Lessos and a 220kV line from Kibos to Kakamega and Musaga, both critical for stabilising the national grid and ending persistent blackouts. 

“Epra has received project proposals for design, finance, construction, operations and maintenance of the two projects, by Africa 50/Power Grid of India, a PPP in collaboration with Ketraco,” said Epra in a public statement yesterday. 

“The 400kV Double Circuit (D/C) Loosuk-Lesso transmission line, a new 400/220kV Lessos substation, 220kV bay extension of the existing 220/132kV Lessos substation and a new 400kV switching substation at Loosuk, with a line in/line out (LILO) of both circuits of existing Loiyangalani-Suswa 400kV D/C line into the new Loosuk substation.”

The second project, Epra said, would entail “the 200kV Double Circuit Kibos-Kakamega-Musaga transmission line, new substation at Kakamega and Musaga, associated 220kV bay extension at Kibos and LILO of both circuits of both circuits of existing Musaga-Lessos 132kV D/C line into new Musaga substation”.

The move comes as President William Ruto’s administration pivots toward PPPs to finance infrastructure amid a severe cash crunch, with the John Mbadi led National Treasury championing the model. 

Africa50 and Power Grid have been in negotiations with Ketraco to construct and operate the 165 km Loosuk-Lessos line as well as the 72 km, 220kV Kibos-Kakamega-Musaga line. The project had earlier been projected to cost Sh41.5 billion.

The proposal was along that of Adani Energy Solutions, but the latter was however, rejected by Kenyans for lack of transparency. 

Adani Energy Solutions plans to build three transmission lines totaling 371 km and three substations, including the 206 km, 400kV Gilgil-Thika-Malaa-Konza line. The projects was projected to cost $736 million (Sh94.9 billion).

Adani was also set to take over the Jomo Kenyatta International Airport (JKIA), a deal that also stirred up a storm, with aviation industry players questioning the deals.The government eventually cancelled both Adani deals following public pressure and corruption allegations involving Adani in the US. 

The latest Epra process is already drawing scrutiny from energy analysts and transparency advocates for a perceived lack of disclosure, mirroring the criticism that contributed to the cancellation of the Adani agreement.

A key point of contention is that EPRA has not provided the public with the private proposal from the power firms, which contains the financial and technical details necessary for a meaningful review of these future pass-through costs.

Without access to the core document, stakeholders cannot adequately assess the potential financial burden on consumers. The Kenya Association of Manufacturers (KAM) has repeatedly warned that high energy costs make Kenyan products uncompetitive, while households continue to grapple with the high cost of living.

The lack of disclosure around the Africa 50/Power Grid proposals raises concerns about transparency and long-term tariff impacts similar to those that sank the Adani deal.

EPRA had not responded to questions regarding the limited consultation venues and the non-disclosure of the project proposals by press time.

Detailed cost disclosure is critical because, under the PPP model, the private developer’s investment is recovered directly from electricity consumers over the long term. Firms that finance power lines will be paid a fee that will be passed on to electricity users, similar to what Kenya Power pays Ketraco for using its high-voltage transmission lines.

These costs are treated as “pass-through costs,” meaning they are added directly to the national power tariff and passed on to households and businesses. This mechanism was a central point of contention in the cancelled Adani project.