Kenya is quietly negotiating with India’s Adani Group for a possible payout after cancelling a Sh96 billion electricity transmission contract a move that has raised fresh concerns over how the government handles mega infrastructure projects.
According to officials at the Treasury’s Public Private Partnership (PPP) Directorate, the talks are aimed at reaching an “amicable settlement” following President William Ruto’s directive last November to terminate the project.
The contract, initially meant to expand Kenya’s national power grid through a private-public partnership, had faced growing scrutiny over transparency and cost concerns.
Sources familiar with the matter say the Ruto administration is pushing for a mutual separation deal that would minimize Kenya’s financial exposure.
Early estimates suggest that Adani could seek compensation exceeding Sh5 billion for sunk costs, though government negotiators hope to settle for much less.
The Adani Group, one of India’s largest conglomerates, has recently faced controversy across several countries over its infrastructure ventures.
In Kenya’s case, the project had been touted as a key part of the government’s plan to stabilize power supply and support industrial growth.
Its sudden cancellation, however, signals a shift in Nairobi’s strategy toward tighter control of strategic assets amid rising public debt.
Officials maintain that the talks are still at an early stage and stress that no compensation has been agreed upon.
The Treasury is reportedly seeking legal guidance to avoid a costly arbitration that could further strain Kenya’s fiscal position.
Energy analysts warn that prolonged uncertainty could affect investor confidence in Kenya’s PPP framework, a key pillar in funding infrastructure under President Ruto’s administration.
Leave feedback about this