Kenya's Strategic Energy Infrastructure Deals: Analyzing the Adani Group and AfDB's $1.3 Billion Power Transmission Concessions

Kenya's recent $1.3 billion public-private partnership (PPP) with India's Adani Group and the African Development Bank's (AfDB) Africa50 subsidiary to modernize its power transmission infrastructure has sparked intense debate. While the project aims to address critical energy gaps and reduce reliance on public debt, it also raises pressing questions about financial viability, corporate governance, and geopolitical risks. This analysis evaluates the long-term sustainability of Kenya's reliance on Adani and AfDB, weighing the potential for scalable infrastructure growth against the pitfalls of opaque partnerships and geopolitical entanglements.

Financial Structure and Risk Allocation: A Double-Edged Sword

The Adani-AfDB PPP is structured as a 30-year concession, with Adani Energy Solutions Ltd. (AESL) responsible for financing, constructing, and operating 171 miles of high-voltage transmission lines and associated substations. Africa50, the AfDB's infrastructure investment arm, is separately managing 150 miles of transmission lines under the same framework. According to Bloomberg, the project's total cost is split between private and public stakeholders, with the Kenyan government claiming it avoids additional borrowing by shifting financial burdens to private partners.

However, the financial terms are not without controversy. A report by highlights that the initial $897 million cost estimate for AESL's segment was reduced by 17.9% to $736.51 million after negotiations with Kenya's Ketraco, aligning it with a public sector comparator of $732.56 million. While this suggests cost efficiency, critics argue that the Adani Group's global reputation for environmental harm, labor rights violations, and financial irregularities introduces unquantified risks. For instance, the U.S. indictment of Adani's founder for fraud in 2024 has already led to the cancellation of other Kenyan PPPs, including a proposed 30-year airport concession.

The risk allocation framework further complicates the project's viability. Under the PPP, Adani assumes operational and maintenance risks, while the Kenyan government retains regulatory oversight. Yet, the lack of transparency in contract negotiations-exemplified by the court suspension of a $736 million Adani-Ketraco deal in October 2024-has eroded public trust. As the World Bank warns, unsolicited PPPs like these often lack competitive bidding and robust governance, potentially leading to value-for-money shortfalls.

Governance and Transparency: A Test for Kenya's PPP Framework

Kenya's PPP Act and Constitution of 2010 mandate public participation and transparency, yet the Adani projects have exposed systemic weaknesses. The cancellation of the Jomo Kenyatta International Airport concession in 2024, following allegations of corruption and public protests, underscores the fragility of Kenya's governance mechanisms. The National Treasury's subsequent review of the PPP framework, including procurement methods and project identification processes, reflects a belated but necessary effort to address these gaps.

Africa50's role as a multilateral partner adds another layer of complexity. While the AfDB's PPP Strategic Framework (2021–2031) emphasizes strengthening enabling environments and financing infrastructure, its collaboration with Adani-a company embroiled in global controversies-raises questions about due diligence. Critics argue that the AfDB's involvement may inadvertently legitimize opaque deals, undermining its mandate to promote sustainable development.

Geopolitical Implications: India's Rise in Africa and Regional Dynamics

The Adani-AfDB partnership is emblematic of India's broader strategic push into Africa. By securing high-profile infrastructure projects, India aims to position itself as a counterweight to China, which holds 16.4% of Kenya's external debt. The AfDB's East Africa Regional Integration Strategy (2023–2027) further amplifies this dynamic, with Kenya benefiting from $6.3 billion in multinational projects aimed at enhancing transport and energy connectivity.

However, India's influence is not without friction. The Adani airport controversy has tarnished India's soft power in Kenya, with critics accusing New Delhi of prioritizing corporate interests over public accountability. Meanwhile, the AfDB's collaboration with the Asian Infrastructure Investment Bank in 2025 signals a shift toward diversified financing models, potentially diluting Kenya's leverage in negotiations.

For Kenya, the geopolitical stakes are high. As East Africa's economic hub, the country must balance its reliance on Indian and Chinese capital with the need to maintain sovereignty over critical infrastructure. The Adani-AfDB PPP, while promising in scale, risks entrenching dependencies that could limit Kenya's strategic autonomy in the long term.

Conclusion: A Model for Scalability or a Recipe for Risk?

Kenya's $1.3 billion power transmission PPP with Adani and AfDB represents a bold experiment in leveraging private capital for infrastructure development. The project's 30-year concession model and cost reductions suggest potential for scalability, particularly in regions with similar fiscal constraints. However, the Adani Group's controversial track record, coupled with Kenya's weak governance frameworks, exposes the nation to corporate and debt risks that could undermine long-term viability.

To mitigate these risks, Kenya must enforce stringent safeguards, including transparent procurement, competitive bidding, and robust oversight mechanisms. The AfDB and multilateral partners should also prioritize due diligence in selecting private partners, ensuring alignment with sustainable development goals. While the Adani-AfDB partnership highlights the promise of PPPs in emerging markets, its success will ultimately depend on Kenya's ability to balance innovation with accountability in an increasingly complex geopolitical landscape.