Billionaire Adani faces new roadblock in Kenya with $736m power project suspension

A Kenyan court has halted a $736 million government deal with India’s Adani Group to build and operate high-voltage power transmission lines for 30 years, Bloomberg reported.

The public-private partnership agreement between Kenya’s state-owned Kenya Electricity Transmission Company (KETRACO) and Adani Energy Solutions was finalized earlier this month, aiming to tackle persistent power blackouts and bolster economic growth.

High Court Judge Andrew Bahati Mwamuye’s ruling on Friday restricts Kenyan authorities from proceeding with the signed project or entering into new agreements with Adani to develop transmission lines, substations, or other electrical infrastructure.

The Law Society of Kenya, which brought the case to court, argued that the agreement with Indian billionaire Gautam Adani’s company is “a constitutional sham” lacking transparency and failing to uphold constitutional principles.

It also stressed that KETRACO and Adani Energy Solutions failed to conduct meaningful public participation in the project, as mandated by Kenya’s Public-Private Partnerships Act of 2021.

The Adani Group, founded by Indian billionaire Gautam Adani, has recently faced increased scrutiny in Kenya. Last month, a court blocked President William Ruto’s plan to grant Adani Airport Holdings Ltd. a 30-year contract to operate Kenya’s main airport.

“Leasing the strategic and profitable JKIA to a private entity is irrational” and contravenes the constitutional principles of “good governance, accountability, transparency, and prudent and responsible use of public money,” the Law Society of Kenya and the Kenya Human Rights Commission stated.

Ruto defended the deals with Adani Group on Thursday, saying that Kenya must rely on public-private partnerships as it has limited borrowing capacity for infrastructure projects.

However, the opacity of these deals has stirred public protests, especially as Kenya faces a high risk of debt distress and persistent corruption, forcing it to turn to the International Monetary Fund for assistance. Mounting debt repayments and unpaid arrears to contractors and suppliers are weighing on the government.