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Kenya pushes for faster delivery of first PPP-funded power lines
Principal Secretary State Department for Energy Alex Wachira during the announcement of Kenya Power's financial results for the Financial Year 2023/2024 at Stanley Hotel, Nairobi on October 29, 2024.
Kenya is pushing to break ground for the first Public private Partnership (PPP)- backed construction of two $311 million (Sh40.4 billion) electricity lines by August next year to ease pressure on the network.
Principal Secretary in the State Department of Energy Alex Wachira on Monday called on Africa50 (an infrastructure investment platform founded by the African Development Bank) and PowerGrid Corporation of India to expedite negotiations with lenders and contractors and start the project within eight months instead of the 12 months stated in the agreement.
The two on Monday inked a PPP deal to build the 400 kilovolts (kV) Lessos-Lossuk line and the 220kV Kisumu-Kibos-Kakamega-Musaga line. They will also build substations for the two lines.
Kenya is currently grappling with an overstretched transmission network which is sometimes blamed for power outages especially in Western Kenyan whenever the lines are not able to accommodate sudden surges.
“The agreement says that works should start within 12 months but as a government we need to fast-track this to within eight months to move with speed and ease pressure on our current transmission lines,” Mr Wachira said.
The lines will increase transmission capacity of electricity to Kisumu, Vihiga and Kakamega counties and thus reduce the voltage instability which has seen the Western part of Kenya bear the brunt of blackouts tied to transmission challenges.
An ageing overloaded transmission network is one of the major causes of unstable power supply especially to Western Kenya, highlighting the push to go for a PPP model and speed up efforts to construct new lines to ease the pressure.
These are the first PPP-funded electricity transmission lines that the Kenya Electricity Transmission Company (Ketraco) will deliver. Africa50 and PowerGrid will own, operate and maintain the lines for 30 years within which they will recoup their investment and also pay the loans funding the project.
African Development Bank, Trade Development Bank and the Dutch Entrepreneurial Bank are expected to provide loans which will fund slightly above three-quarters of the project.
Africa50 and PowerGrid privately initiated the project in 2018 which was approved by the PPP Directorate in July this year. The Attorney General then cleared the project in September this year paving the way for finalisation of the negotiations.
The PPP model has become the main route to build new power transmission lines and substations amid struggles by the Exchequer to free up funding the capital-intensive projects.
The State-owned firm recently disclosed that it is betting on the PPP model to bridge a funding gap of more than $4 billion (Sh517.8 billion) over the next 20 years.
