New Delhi, September 20, 2024: The Adani Group has been looking to expand its footprint in the power sector globally with talks on for a $1.3-billion deal for the construction of three power lines in Kenya. It already has a power purchase agreement with Bangladesh and renewable projects in Sri Lanka and Australia, which are under scrutiny.
After reports said that Adani Transmission had been awarded deals for as much as $1.3 billion to construct 388 km (241 miles) of high-voltage transmission lines, the Kenya Electricity Transmission Co. has said it’s still in talks with Adani Energy Solutions Ltd. Adani has also said that the talks are still on.
According to media reports, Adani’s proposal includes the construction of a new 206-km Gilgil-Thika-Malaa-Konza line, another 95 km linking Rongai-Keringet-Chemosit and approximately 98 km for the Menengai-Ol Kalou-Rumuruti conduit.
Adani is looking at an 11.5% cost of debt and a 16% equity internal rate of return while Kenya Electricity Transmission Company Ltd, commonly referred to as Ketraco, a wholly-owned parastatal of the Government of Kenya which serves as the primary Transmission System Operator in the country, for its part, wants a lower 9.5% cost of debt and 14% IERR.
Among other global ventures in the power sector, Adani entered into a power purchase agreement with the Bangladesh Power Development Board (BPDB) in 2017. Adani Power shall supply 1,496 MW net capacity for 25 years via a 400 kV dedicated transmission system connected to the Bangladesh grid from its Godda power plant in Jharkhand. The project was commissioned in June 2023 and supplies 100% of power to Bangladesh.
Following political turmoil in the neighbouring nation, the interim government in Bangladesh is expected to scrutinise its deal with the Indian conglomerate. There have been concerns in the past over the cost of power provided by the Adani power. In February 2023, authorities in Bangladesh wrote to India seeking a revision of an agreement with Adani Power Ltd over the “excessive” pricing of coal.
“Bangladesh needs power and I don’t think cancelling a PPA serves a purpose as there are power outages in the country. Any harsh decision will also spoil the investor sentiments and no country would want to do that now,” says a former top bureaucrat in the power ministry.
On August 27, Adani Group Chairman, Gautam Adani, wrote to Muhammad Yunus, the country’s chief advisor, over $800 million worth of pending bills.
The Adani Group has also been expanding its footprint in the green energy sector with a wind power project in Sri Lanka and a solar project in Australia. The company aims to develop about 1,500 MW of renewable energy projects in Australia within five years and is ready to start two solar projects there.
According to the reports published in businesstoday.in the company has secured land agreements for two major projects, each with a capacity of 100 MW-200 MW, in South Australia and Queensland. It has initiated the design and tendering phases for both. The Aussie solar projects are in addition to its $ 12.1 million investment in the planned Carmichael coal mine in Queensland, and rail and port facilities. The project had faced stiff opposition from local communities.
In Sri Lanka, the Adani Group was set to invest over $440 million in the 20-year agreement to develop 484 megawatts of wind power projects in the island nation’s north-eastern regions of Mannar and Pooneryn.
The project has come under legal scrutiny with litigation in Sri Lanka’s Supreme Court with petitioners raising environmental concerns and a lack of transparency in the bidding process to grant the project to Adani Green Energy.
