Africa’s energy conversation has long been dominated by generation plants commissioned, solar farms inaugurated, and gas turbines procured. Comparatively, little attention has been paid to transmission: the infrastructure that actually moves electricity from where it is produced to where it is needed. This gap is one of the continent’s most consequential infrastructure deficits.

The Public-Private Partnership (PPP) model, which has been widely deployed in electricity generation through Independent Power Producers (IPPs), has rarely been applied to transmission infrastructure in Africa. The reasons are well understood — and largely surmountable. Kenya is now demonstrating that.

Kenya’s USD 311 Million Transmission PPP

In December 2025, the Kenya Electricity Transmission Company (KETRACO) signed a landmark PPP agreement with a consortium comprising Africa50 and Power Grid Corporation of India (POWERGRID) for two high-voltage transmission lines valued at USD 311 million (KES 40.4 billion). The project is fully financed and implemented by the private sector, with no commitment of public funds.

Africa50 is a pan-African infrastructure investment platform backed by 33 African governments, two African central banks, the African Development Bank Group, and the Public Investment Corporation of South Africa. POWERGRID is one of the world’s largest transmission utilities, responsible for transmitting approximately 50% of India’s national electricity supply. The consortium brings both institutional credibility and deep technical expertise to the project.

The project covers two strategic corridors: the 400kV Lessos–Loosuk line (180km) serving northern Kenya and integrating geothermal and wind energy sources; and the 220kV Kibos–Kakamega–Musaga line, which strengthens interconnection with Uganda and improves transfer capacity across western Kenya.

Key Terms of the Concession

The structure of this PPP is as instructive as the project itself. It was initiated as a Privately Initiated Proposal under Kenya’s PPP Act, 2021, and received full approvals from the PPP Committee, KETRACO’s Board, the Energy and Petroleum Regulatory Authority (EPRA), and the Office of the Attorney General before signing on December 15, 2025.

Principal terms include:

  • Africa50 and POWERGRID will establish a dedicated project company to manage the full asset lifecycle from construction through 30 years of operations.
  • KETRACO will make availability-based payments triggered only upon independent certification that the infrastructure meets agreed performance standards.
  • An independent expert will oversee delivery and performance for the duration of the concession.
  • The private sector parties are required to provide performance securities, creating binding financial consequences for non-delivery.
  • Comprehensive insurance cover is mandatory across both construction and operational phases.
  • Strict local content requirements ensure significant participation by Kenyan professionals, contractors, and suppliers.
  • At the end of the 30-year term, all assets revert to KETRACO, the Kenyan public ultimately retains ownership of what was built.

The project has been regarded as a well-structured and bankable transaction. The availability payment mechanism aligns private sector incentives with public service delivery. The asset reversion clause protects long-term national interest. The combination of regulatory approval, legal scrutiny, and performance guarantees sets a standard that other African countries can and should replicate.

Kenya is not alone in recognizing this opportunity in law. Nigeria’s Electricity Act, 2023 expressly encourages PPP and concessionary arrangements to improve the performance of the country’s transmission network, a provision that remains largely unactivated. The legal architecture exists; what is needed is the institutional will to deploy it.

Why Africa Hesitates on Transmission PPPs

Aside the broader socio economic that bar the inflow of funds into the African energy sector, it appears that most African governments have been reluctant to invite private capital into transmission value chain. Four concerns dominate the conversation.

1.  Security of Supply

The most frequently cited objection is that a private concessionaire could interrupt or withhold transmission service. It is not unreasonable; however, it is addressable.

A well-structured transmission PPP should include:

  • Step-in rights that allow the government or a designated lender to assume operational control if the private party defaults
  • Escrow arrangements that protect revenue flows
  • Performance bonds and parent company guarantees that create financial consequences for failure
  • Independent system operation, which ensures that even where a private party owns the infrastructure, grid dispatch decisions remain with a national operator

2.  Loss of Control

For many governments, transmission infrastructure carries sovereign significance. The reluctance to cede operational management to the private sector is understandable, particularly where past privatization experiences have been contentious.

However, state ownership without state investment delivers nothing because retaining control of infrastructure that cannot be built or maintained is not sovereignty but stagnation.

Under a well-structured concession, governments continue to benefit:

  • Governments continue to earn through concession fees, corporate taxes, VAT on revenues, and local content requirements that put money into the hands of local contractors
  • Regulatory bodies retain oversight over tariffs, service standards, and performance obligations
  • Assets return to the state at the end of the concession, often in better condition than when they started — because the concessionaire had a financial incentive to maintain them

The focus should be to have the kind of control that actually delivers electricity to citizens.

3.  Monopoly Risk

Transmission is a natural monopoly and concentrating multiple transmission corridors within a single private entity therefore presents legitimate governance risk. If one private player owns all the lines, they can hold the market hostage.

There are proven mechanisms to manage this:

  • Concession splitting — dividing transmission corridors across multiple concessionaires so that no single private party controls the entire grid
  • Ring-fencing by geography or voltage class — ensuring high-voltage backbone lines, regional interconnectors, and distribution networks are managed separately
  • Grid redundancy — designing transmission networks with independent pathways so that if one concession area fails, the rest of the grid continues to function
  • Independent system operation — separating infrastructure ownership from grid operation so that a national operator controls dispatch and system balancing regardless of who owns the lines

Monopoly in transmission does not have to mean monopoly power. Again, balanced regulation is the antidote.

  1. Failed PPPs

Africa’s history with PPPs is mixed. There have been poorly structured deals, opaque procurement processes, inflated project costs, and concessionaires who delivered far less than promised. Countries that have had bad PPP experiences are understandably cautious.

Yet the answer to bad PPPs is not no PPPs. It is to have better ones.

Research shows that while 42 African countries have enacted PPP legislation, very few attract meaningful private investment because the institutional frameworks to structure and oversee them are weak. The OECD has found that only 13% of African countries with PPP units actually conduct fiscal risk assessments on projects, and virtually none conduct post-project audits.

The Opportunity

Kenya’s KETRACO transaction is proof of concept that can be replicated across the continent. The private sector must play a larger role, not just in generation, where Independent Power Producers have become relatively common, but also in transmission, where private participation remains rare and underdeveloped.

Africa cannot build enough generation to power its future if the transmission infrastructure to carry that power remains underfunded and publicly constrained. The PPP model is not the only solution but it is a proven one, and it is time more African governments used it.

References

  1. Africa50 — KETRACO Signs Landmark PPP (December 2025) — https://www.africa50.com/media/news/article/ketraco-signs-landmark-public-private-partnership-with-africa50-and-powergrid-corporation-of-india-to-deliver-usd311-million-power-transmission-project/
  2. KETRACO Official Statement — https://www.ketraco.co.ke/information-center/media-center/news/ketraco-signs-landmark-public-private-partnership-africa50-and
  3. Power Technology — KETRACO PPP Coverage — https://www.power-technology.com/news/ketraco-signs-ppp-electricity-transmission-lines/
  4. Mondaq — Nigeria Electricity Act 2023: Changes in the Power Sector — https://www.mondaq.com/nigeria/renewables/1336450/unveiling-the-electricity-act-2023-changes-in-the-power-sector-opportunities-and-the-next-steps
  5. AfDB / AFUR — Private Investment in Electricity Transmission in Africa (2024) — https://africanschoolregulation.org/wp-content/uploads/2024/03/Private-investment-in-electricity-transmission-in-Africa-Program-FINAL.pdf
  6. World Bank — Infrastructure and Africa’s Development: The PPP Imperative (2024) — https://blogs.worldbank.org/en/ppps/infrastructure-africa-s-development-ppp-imperative
  7. 7.  OECD — Africa’s Development Dynamics 2025 — https://www.oecd.org/en/publications/2025/10/africa-s-development-dynamics-2025_d153f2a8/