Kenya in Talks to Compensate Adani for Cancelled KSh 96 Billion Power Project
Kenya has opened negotiations with India’s Adani Group to determine compensation following the government’s cancellation of a KSh 96 billion electricity transmission project.
The project, which was part of a 30-year Public-Private Partnership (PPP) deal, was terminated in November 2024 on the orders of President William Ruto after the U.S. indicted Gautam Adani, founder of the Adani Group, over alleged investor fraud and bribery.
According to the Public-Private Partnership Directorate at the National Treasury, the government has opted for a mutual separation instead of a formal contract termination, which would attract higher penalties.
“The termination process is underway, and the final costs are yet to be determined,” the PPP Directorate said in a brief to Parliament, as reported by Business Daily.
How Much Kenya Could Pay
Legal experts estimate that Kenya could pay the Indian conglomerate at least KSh 5 billion in compensation. The figure covers preliminary expenses Adani incurred during contract preparation and feasibility work.
Under the proposed mutual agreement, Kenya would issue a nominal reimbursement rather than full termination damages, significantly lowering the potential payout.
Project Scope
The contract required Adani Energy to build two power transmission lines and two substations to strengthen Kenya’s national grid.
These included:
- A 400kV, 206km Gilgil–Thika–Malaa–Konza line, intended to boost electricity supply to the Nairobi metropolitan area by 2027.
- A 70km, 132kV Menengai–Ol Kalou–Rumuruti line, designed to enhance power distribution in Nyandarua and Laikipia counties and provide an alternative evacuation route for the Menengai geothermal complex.
- Two substations: a 400/220/132kV facility in Rongai and a 132kV substation in Thurdiburo, both scheduled for completion by 2028.
Why Ruto Cancelled the Deal
The cancellation followed a U.S. indictment against Gautam Adani and his nephew Sagar Adani, accusing them of misleading American investors during a $750 million Adani Green bond sale and paying bribes to secure power contracts in India.
Although the Trump administration has since softened its position, Adani’s legal troubles prompted Kenya to cut ties to avoid reputational and financial risk.
Adani representatives have reportedly met with U.S. officials seeking to have the criminal charges dropped.
The case underscores the delicate balance Kenya faces in attracting foreign investors while maintaining transparency and integrity in public-private partnerships.
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Kenya in Talks to Compensate Adani for Cancelled KSh 96 Billion Power Project