Kenya inks Sh40 billion deal to transmit renewable power

High Voltage power line in Suswa. [Courtesy]

Kenya has signed a Sh40.4 billion ($311 million) power transmission deal that will improve electricity supply largely in the Western region through a public private partnership (PPP) deal. 

The deal will see the construction of two key transmission lines to evacuate renewable power as the country looks to add 10,000 megawatts (MW) to the national grid. 

The two lines are: 400 kilovolts (kV)at Lessons-Loosuk while the Kibos - Kakamega - Musaga line will transmit 220kV. 

The Lessos - Loosuk line will traverse Samburu, Baringo, Nandi and Elgeyo Marakwet Counties and will introduce an alternative route for evacuating wind power from Lake Turkana.

This will strengthen the stability of the grid through the 430 - kilometre Loiyangalani - Suswa line. It will also enable the evacuation of geothermal power from Baringo - Paka - Silali resource zone. 

The second line, the 220kv Kibos - Kakamega - Musaga will improve stability of the grid in the Western regions once complete, reducing blackouts in Kisumu, Vihiga and Kakamega regions. 

It will introduce high voltage supply into Kakamega while improving regional network adequacy cutting down on technical losses and load shedding in the mentioned areas. 

The PPP is between the Kenya Electricity Generating Company Limited (Ketraco), Africa50 and Power Grid Corporation of India.

Energy Principal Secretary Alex Wachira said the two transmission lines represent critical reinforcements to the national grid and will significantly improve system reliability, redundancy and grid resilience.

“We have 80MW of steam in Baringo. We need that steam into the national grid by 2028,” said the PS.

He said the model also aligns with Kenya’s drive to accelerate project delivery by shifting capital intensive transmission investments to private players under strong regulatory oversight.

Engineer Kipkemoi Kibias, Ketraco’s acting Managing Director, said the project will involve design, financing, operation and maintenance of the two high voltage lines.

He anticipates that once complete, the project will directly contribute to the lowering of electricity costs for Kenyans.

“These lines will enhance grid reliability and stability in the North Rift and Western regions and further reduce technical losses while supporting industrial growth in underserved counties,” he said.

He said for such capital-intensive projects, PPP is the ideal way to execute them. He noted that the deal is a culmination of a comprehensive and rigorous process of seven years that involved intensive negotiations, technical evaluations and stakeholder consultations.

“This project directly supports the Least Cost Power Development Plan (LCPDP) and Ketraco’s Transmission Master Plan (TMP). It also advances the goals of Kenya Vision 2030, regional integration and green industrialisation,” said Kibias.

National Treasury Principal Secretary Dr Chris Kiptoo noted that the financing structure of the project reflects responsible fiscal management referencing on the country’s shrinking fiscal space for more debt.

“The arrangement safeguards public finances and supports continued investment in health, education, agriculture and other priority sectors,” said the PS.

“Cost recovery will follow an availability -based tariff covering debt service, equity return, operations and maintenance, insurance and statutory obligations,” he said.

The project’s concession period is capped at 30 years.

“The investment will strengthen the transmission system, expand economic opportunity and support households, markets, schools and hospitals across the project counties and beyond,” he said.