The government will be compelled to pay the infamous Adani Group deal team for the works they had done prior to the cancellation of the deal by President William Ruto late last year. 

According to Energy PS Alex Wachira, Adani had already done a feasibility study before laying down the actual work. Currently at the final stages of terminating the contract, the payment will be part of the processes. 

Speaking before the National Assembly Committee on Public Debt and Privatisation, the PS said the cancellation process took this long as some commitments such as that of Jomo Kenyatta International Airport were already in advanced stages before the cancellation.  Wachira was answering a question on whether a new investor had been on board regarding the project since the cancellation of the deal. 

Lower our cost

“Remember unlike the airport, as we had moved a step further, we had signed the project agreement. So, once we sign the final divorce papers, then that’s when we can be able to onboard any new investor. But the ministry is very keen on having new investors to take up this project,” he said.  The actual cost of the cancellation, is however, yet to be established as the feasibility study cost will have to be factored in order to come with an accurate figure. 

“We are in the final stages of the divorce, because some of the things that we want to acquire from Adani – they have done the feasibility studies, they have done the plans, the drawings and we need to acquire that. Then now for us, we have to compensate them,” he explained. 

“So, the final amount is not yet agreed upon and once it is agreed upon, that’s when we will be able to state the exact figure.” 

According to the PS, the new Private-Public Partnership Project for the infrastructure will be much cheaper compared to the Adani one. 

“It will help us lower our cost of the next person who is going to come on board, because he is not going to do what Adani has done, the preliminaries. So, they will have to quote a smaller amount than what Adani had proposed. So, either way, if we do not acquire those documents, then it will be costly in the next project, and we still have to pay,” he said. 

The Adani deal subject had arisen as a result of the presenting on the recently accessed concessional loan facility of €82.7 million (Sh12 billion), from France for the National System Control Centre (NSCC) project that will be managed by the Kenya Electricity and Transmission Company (Ketraco) to address the nuances of power blackout. 

This will be through a €48.6 million (Sh7.1 billion) concessional sovereign loan from the French Development Agency (AFD) and a €34.1 million (Sh4.97 billion) concessional loan from the French Treasury according to Ketraco. 

The construction contract has been awarded to a consortium comprising GE Vernova and Larsen & Toubro (L&T) which is a flagship example of strategic French financing and French expertise in the energy sector in Kenya.   

Repayment period

According to Wachira, the loan is set to mature in 20 years’ time at a rate of 0.883 per cent, a loan which provides an ample repayment period.   According to John Mativo, Ketraco Managing Director, the project is expected to transform Kenya’s electricity grid into a robust, efficient, and regionally integrated system involving the design, supply, and installation of a dual-redundant national control system to enhance Ketraco’s capacity as the Transmission System Operator, in line with the Kenya National Transmission Grid Code.  

“The NSCC is the backbone infrastructure that will anchor Kenya’s transition to a more stable, efficient, and interconnected grid.” he said during the site inspection.  What the ministry largely is trying to do with the project is that it aims to make the country the single transmission power operator of the Eastern African Power Pool 13-member countries. 

This, according to Wachira, will not only help in affordable electricity transmissions but will also help in creating employment opportunities for Kenyans at the control Centre. 

“We are talking of connecting a grid of the 13 countries where we can be able to trade power through and if you look at Agenda 2063 of the African Union, it is talking that we shall have a single African single electricity market. For us to have that, we need to have a modern national system control centre,” he explained.