The Ksh.94 billion deal between KETRACO and Adani for the construction of 422 kilometers of transmission lines is currently at the Draft Agreement stage.

This stage involves several key processes, including the approval of the project and a financial risk assessment report prepared by a negotiating team.

According to the Public Private Partnerships Act, the evaluation process for this deal must undergo six key stages during the Draft Agreement phase.

The process is part of the due diligence on the private party, Adani Energy Solution Limited.

First, Adani will be required to submit a Privately-Initiated Proposal to KETRACO, acting as the contracting authority on behalf of the State. Adani will then pay a non-refundable review fee of at least half a billion shillings.

KETRACO will then evaluate the proposal and forward it to the Public Private Partnerships Directorate. 

The Directorate will then conduct due diligence on Adani Energy, working in coordination with KETRACO, and assess the proposal.

After this assessment, the Directorate makes a recommendation on whether to approve or disapprove the proposal. The assessment report and recommendations are then sent back to KETRACO.

Following this, the Public Private Partnerships Committee makes the final decision to approve or disapprove the proposal and provides guidance on the procurement method if it is approved.

In conducting due diligence on Adani Energy Solution Limited, KETRACO must ensure that the proposal includes sufficient information to assess affordability and potential contingent liabilities, reflects a fair market price, includes all necessary supporting documents, ensures efficient transfer of risk, aligns with national infrastructure priorities, and offers value for money.

"If this PIP is not used well and if information is not shared to the pubic rightfully, there will be a perception and it is an avenue of corruption," said KETRACO GM Eng Anthony Musyoka.

The initial Total Project cost of the KETRACO - ADANI Deal as at 8th March 2024 was Ksh.130.8 billion with a 12.94 % cost of debt.

The revised offer by KETRACO as at August 28, 2024 brought down the Total Project Cost to Ksh.94.4 billion with a 9.5% cost of debt.

"You require very little money for negotiation, but it also has a down side. It seems to lack competition ..so what that mean means is you can get a PIP at a high price.. so that is an area as a contracting authority you must be careful," said Musyoka.

The ultimate Clearance of the Draft Project Agreement will be undertaken by the Attorney General and Notification of Award presented to the Cabinet by KETRACO on behalf of the State.