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Kenya has signed a new agreement to attract $311 million in private investment for the construction of two high-voltage electricity transmission lines, marking another step in the government’s push to improve the country’s power infrastructure amid financial constraints. The deal was signed on Monday, according to a statement from the finance ministry, and involves a partnership between a pan-African infrastructure fund and India’s state-owned PowerGrid Corporation.
The project comes at a time when Kenya is struggling with high public debt and limited room to increase government spending. With traditional borrowing options becoming more difficult, the government has increasingly turned to public-private partnerships and other alternative financing methods to fund major infrastructure projects. Officials say this approach allows the country to continue developing critical systems such as electricity transmission without placing further strain on public finances.
Under the agreement, Africa50, a Morocco-based infrastructure investment fund that is largely owned by African governments, will work together with PowerGrid Corporation of India. The two partners will be responsible for designing, financing, constructing, and operating the transmission lines, as well as the associated substations. Africa50 said the project company will manage the full lifecycle of the infrastructure, from construction through to daily operations, under a 30-year concession arrangement.
The new transmission lines are expected to play a key role in improving the reliability and stability of Kenya’s electricity supply. According to Africa50, the project will help deliver cleaner, more affordable, and more dependable power to millions of Kenyans. While specific details about how much transmission capacity will be added were not disclosed, officials believe the investment will significantly strengthen the national grid.
Kenya Electricity Transmission Company Limited (KETRACO), a state-owned firm, will act as the contracting authority for the project. The finance ministry said the new infrastructure will help reduce technical losses in the power system, minimize load shedding, and improve overall system stability. It will also make it easier to connect renewable energy sources, such as wind, solar, and geothermal power, to the national grid.
Kenya has experienced several nationwide blackouts in recent years, many of them caused by overloads on transmission lines during periods of high demand. As electricity consumption continues to grow, the existing network has struggled to cope, leading to system failures and disruptions. Expanding and modernizing transmission infrastructure has therefore become a priority for the government as it seeks to support economic growth and meet rising energy needs.
However, financing such large-scale projects has been challenging. Kenya’s growing debt burden, combined with public opposition to new taxes, has limited the government’s ability to raise funds through conventional means. President William Ruto’s administration has responded by actively seeking partnerships with private investors who can provide capital and technical expertise in exchange for long-term returns.
This strategy has not been without controversy. Critics argue that some public-private partnership agreements lack transparency and could expose the government to hidden financial risks in the future. They warn that poorly structured contracts may end up costing taxpayers more over time. The government has dismissed these concerns, maintaining that the deals are carefully structured and necessary to keep essential infrastructure projects moving forward.
The new agreement follows a setback last year, when a proposed power transmission project involving India’s Adani Group was cancelled. That deal was dropped after the company’s founder was indicted in the United States, prompting the Kenyan government to walk away from the arrangement. The latest partnership with Africa50 and PowerGrid is seen as a fresh attempt to advance Kenya’s power transmission goals while avoiding similar complications.
Overall, the government says the $311 million investment will help strengthen Kenya’s electricity network, reduce the risk of blackouts, and support the country’s transition to cleaner energy, all while easing pressure on public finances.