Director General of the Energy and Petroleum Regulatory Authority, Daniel Kiptoo, during the release of the annual energy sector statistics/FINANCE

Lack of sufficient transmission capacity is a barrier to industrial growth, rural electrification and Kenya’s integration into the regional energy market.

Energy experts backing the government’s bid to go Build Operate Transfer (BoT) say it is the only viable funding model to upgrade the country’s transmission lines, which are currently strained, leading to inefficiencies and occasional blackouts.

According to annual power sector statistics released by the Energy and Petroleum Regulatory Authority (EPRA), Kenya experienced a 23% loss of system generated power due to aging transmission and distribution networks in the last financial year, an average of over 18 .5% benchmark set by the government.

This means that power distributor Kenya Power lost almost a quarter of the power it bought from producers in the financial year, an amount that has to be paid for by power consumers and general ratepayers.

Technical losses occur naturally and consist mainly of power dissipation in electrical system components such as transmission and distribution lines, transformers and metering systems.

Their views follow President William Ruto’s endorsement of the Sh96 billion power deal between Kenya Electricity Transmission Company Limited (KETRACO) and Adani Energy Solutions, the energy arm of India’s Adani Group, to develop transmission lines and substations.

This project which was stayed by the High Court on Friday covers the development of a 400kV Gilgil-Thika-Malaa-Konza line (double circuit) spanning 208.73 km and will include new substations.

A 220 kV line covering 99.98 km will also include substations at three locations: Rongai, Keringet and Chemosit.

The 132 kV line, covering 89.88 km, will have substations at Menengai, Ol Kalou and Rumuruti. More substations will also be built to support the 400 kV transmission network, to enhance regional energy stability and to expand the local distribution network.

It has also attracted public debate, with some Kenyans insisting it be stopped, citing its opacity and lengthy mandate akin to state capture. In the middle of this week, President Willliam Ruto joined the debate on the infrastructure funding model, calling on Kenyans to give way to the BoT, saying Kenya will achieve its goal of connecting a national electricity grid by 2030 without burdening its citizens.

He clarified that his government will only pay investors using a voluntary tax that has already been negotiated and expressed confidence that the energy investment will create jobs and expand industrialization.

“This investment is not funded by the government, but a private sector investment. They will put 12 billion of their own money into their project to generate power and we will buy the power from them,” he said.

Energy expert and commentator Clinton Mbithe says the PPP model of Power Purchase Agreement that has dominated the power sector for decades is expensive and prone to external pressures such as currency fluctuation.

“Unlike the PPA, the type of partnership promoted by the Kenyan government to finance partners like Adani Energy will not directly incur Kenya debt. The financiers will recoup their investment through taxes while the facility has been used by Kenyans for several years,” Mbithe said.