The deal, which was meant to improve the country’s power transmission network, was stopped after concerns over the company’s founder, Gautam Adani, who was indicted in the United States last year.
According to officials from the Public Private Partnership (PPP) Directorate, the government hopes to end the contract peacefully rather than through a costly legal battle.
According to officials from the Public Private Partnership (PPP) Directorate, the government hopes to end the contract peacefully rather than through a costly legal battle.
Discussions are ongoing to find what both sides call a “mutual separation” — an approach that allows each party to move on without spending more public money.
The 30-year Public-Private Partnership had been signed in October 2024 between Adani Energy and the Ministry of Energy.
The 30-year Public-Private Partnership had been signed in October 2024 between Adani Energy and the Ministry of Energy.
Under the agreement, Adani was to design, finance, build, and operate two major power transmission lines and two substations.
The plan was aimed at improving power stability in key parts of Kenya, especially around Nairobi and the Rift Valley region.
Adani Energy was to construct a 400kV, 206-kilometre transmission line stretching from Gilgil–Thika–Malaa–Konza, which was expected to increase electricity supply to the Nairobi region by 2027.
Adani Energy was to construct a 400kV, 206-kilometre transmission line stretching from Gilgil–Thika–Malaa–Konza, which was expected to increase electricity supply to the Nairobi region by 2027.
Another 70-kilometre line, rated 132kV, was planned between Menengai–Olkalou–Rumuruti, designed to channel geothermal power from the Menengai fields and improve reliability in the central highlands.
Two substations were also part of the project — one at Rongai (400/220/132kV) and another at Thurdiburo (132kV) — both expected to be completed by 2028.
However, the plan collapsed after President William Ruto ordered the deal to be cancelled in November 2024. His decision came shortly after U.S. prosecutors accused Gautam Adani and his nephew Sagar Adani of misleading investors and bribing officials to secure energy contracts in India.
Two substations were also part of the project — one at Rongai (400/220/132kV) and another at Thurdiburo (132kV) — both expected to be completed by 2028.
However, the plan collapsed after President William Ruto ordered the deal to be cancelled in November 2024. His decision came shortly after U.S. prosecutors accused Gautam Adani and his nephew Sagar Adani of misleading investors and bribing officials to secure energy contracts in India.
The U.S. government alleged that Adani Group provided false compliance information during a $750 million bond sale linked to Adani Green Energy.
Because Kenya initiated the termination, the government may have to compensate Adani for losses already incurred. Legal experts estimate the amount could exceed KSh 5 billion, though the Treasury has not given an official figure.
In the words of one PPP official, “The termination process is underway, but the final costs will depend on how both parties agree to close the contract.”
Because Kenya initiated the termination, the government may have to compensate Adani for losses already incurred. Legal experts estimate the amount could exceed KSh 5 billion, though the Treasury has not given an official figure.
In the words of one PPP official, “The termination process is underway, but the final costs will depend on how both parties agree to close the contract.”
Kenya’s preference for a negotiated exit reflects an effort to avoid expensive court battles and maintain diplomatic relations with India.
The government’s strategy is to reimburse only the verified expenses that Adani incurred while preparing for the project, rather than paying the full contract value.
Why Ruto Cancelled the Deal
President Ruto’s move was both political and ethical. Sources say the U.S. indictment against Adani created international pressure and cast doubts on the integrity of the project.
The government’s strategy is to reimburse only the verified expenses that Adani incurred while preparing for the project, rather than paying the full contract value.
Why Ruto Cancelled the Deal
President Ruto’s move was both political and ethical. Sources say the U.S. indictment against Adani created international pressure and cast doubts on the integrity of the project.
Critics argued that partnering with a company facing corruption allegations could harm Kenya’s global image and affect other international investments.
Following the cancellation, Adani Group officials began private talks with the U.S. government to have the criminal charges dropped, especially after Donald Trump returned to power. Reports suggest Washington may now be softening its position, though investigations into Adani’s financial dealings continue.
Kenya’s energy sector still needs new transmission infrastructure to meet growing demand. The Ministry of Energy is now exploring local partnerships and regional investors to replace the cancelled deal.
Officials insist that cancelling the Adani project will not delay the country’s electrification goals.
Following the cancellation, Adani Group officials began private talks with the U.S. government to have the criminal charges dropped, especially after Donald Trump returned to power. Reports suggest Washington may now be softening its position, though investigations into Adani’s financial dealings continue.
Kenya’s energy sector still needs new transmission infrastructure to meet growing demand. The Ministry of Energy is now exploring local partnerships and regional investors to replace the cancelled deal.
Officials insist that cancelling the Adani project will not delay the country’s electrification goals.
“Kenya remains committed to expanding its power grid and supporting industrial growth,” a senior Treasury source said.
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