The Adani Group, an Indian multinational conglomerate owned by billionaire Gautam Adani, is in the process of negotiating a Ksh. 116 billion ($900 million) deal to upgrade Tanzania’s electricity transmission lines. This ambitious undertaking is part of the company’s broader expansion strategy into Africa, particularly in the infrastructure and energy sectors, areas that the group has been keen to dominate. According to Bloomberg, which cited a Tanzanian government official familiar with the negotiations, the project will be executed through a public-private partnership (PPP) arrangement.
This potential deal underscores Tanzania’s growing appeal as a key destination for foreign infrastructure investments in East Africa, following the government’s push to modernize its energy infrastructure and reduce power deficits. David Kafulila, the executive director of Tanzania’s Public-Private Partnership Centre, confirmed the discussions between the Adani Group and Tanzanian officials, highlighting the strategic importance of the project to both parties. The high-voltage power lines to be constructed are expected to significantly bolster Tanzania’s capacity to transmit electricity, thereby improving access to power across the nation.
Public-Private Partnerships (PPP) Driving Infrastructure Development
Tanzania’s focus on PPPs as a vehicle for infrastructure growth has made the country attractive to international companies seeking profitable opportunities in Africa’s emerging markets. This deal comes at a time when the Tanzanian government is actively working on increasing its electricity grid to meet rising demand from industries, businesses, and households. Adani’s involvement in Tanzania is not the only high-profile partnership in the works. The Tanzanian government is also in talks with the UK-based Gridworks Development Partners LLP for another $300 million project to construct power lines, which similarly operates under the PPP framework.
Such partnerships are central to Tanzania’s development agenda, as the country aims to increase its electricity generation and transmission capacity. Power generation is critical for industrialization, which Tanzanian President Samia Suluhu Hassan has prioritized. In 2022, Tanzania’s total electricity generation capacity stood at 1,601 megawatts, significantly lower than its future energy needs. The planned projects by Adani and Gridworks are expected to alleviate bottlenecks in electricity supply and transmission, contributing to the realization of the country’s industrialization vision.
Adani’s Strategic Expansion in Africa
The power line project in Tanzania is not the first foray by Adani into East Africa. Earlier this year, Adani International Ports Holdings (AIPH), a subsidiary of the Adani Group, signed a 30-year concession agreement with the Tanzania Ports Authority to operate and manage the Container Terminal 2 (CT2) at the Dar es Salaam port. This move solidifies Adani’s interest in playing a significant role in East Africa’s infrastructural and economic development.
With the Dar es Salaam port serving as a key maritime hub for Tanzania and its landlocked neighbors, such as Zambia, Malawi, and the Democratic Republic of Congo, the agreement is expected to bolster Tanzania’s logistics and port capabilities. The agreement, which came in June 2024, was heralded as a landmark achievement for Tanzania’s transport infrastructure. Adani’s management of CT2 at the Dar es Salaam port will improve the port’s efficiency, capacity, and service delivery, enhancing Tanzania’s standing in international trade.
Controversies Surrounding Adani’s African Investments
Despite its growing involvement in Africa, the Adani Group has not been without controversy. In Kenya, the group’s proposed $1.85 billion (Ksh. 239 billion) investment deal to expand the Jomo Kenyatta International Airport (JKIA) in Nairobi has faced legal and public opposition. Adani Airport Holdings Limited (AAHL), a subsidiary of the conglomerate, was poised to take over operations at JKIA under a long-term lease agreement. However, the Kenya Human Rights Commission (KHRC) and the Law Society of Kenya (LSK) lodged a lawsuit in September 2024 to block the deal. The legal action, citing concerns over transparency and national interest, led to a court order halting further action on the lease until the matter is resolved. The case is up for mention on October 8, 2024.
Furthermore, the group is also involved in a Ksh. 94 billion ($730 million) deal with the Kenya Electricity Transmission Company Limited (KETRACO) to construct 422 kilometers of power transmission lines in Kenya. This agreement mirrors the strategic objectives of the group’s Tanzanian project, aimed at enhancing electricity transmission capacity in the region.
Adani’s Legal and Ethical Challenges
The controversies surrounding Adani are not limited to Kenya and its African investments. The conglomerate has been embroiled in a series of legal and ethical issues globally. In 2023, an American investment research firm accused the Adani Group of fraud and market manipulation. The company faced allegations of inflating its stock prices, distorting financial reports, and manipulating market data to attract more investors. These accusations led to a dramatic plunge in the value of Adani’s stocks, wiping out billions of dollars in market capitalization.
The conglomerate has also faced allegations of political corruption, tax evasion, and environmental violations. In addition, Adani has been accused of using its vast resources to silence critics, including suing journalists who have reported on the company’s alleged malpractices. These legal and ethical issues have marred Adani’s public image, even as it continues to expand its global operations.
Tanzania’s Infrastructure Challenges and the Road Ahead
Tanzania, like many African countries, has long struggled with inadequate power supply and unreliable electricity transmission. Chronic power shortages and blackouts have hindered economic growth, especially in rural areas. The government has prioritized improving energy access and distribution as part of its long-term development strategy. Major projects, such as the Stiegler’s Gorge hydropower project on the Rufiji River, aim to generate up to 2,100 megawatts of electricity and have been touted as game-changers in addressing the country’s energy deficit.
Adani’s planned investment in Tanzania’s power lines is expected to complement ongoing efforts to modernize the electricity infrastructure. By expanding the transmission network, the project will help reduce energy losses, increase access to electricity in underserved areas, and boost industrial development. However, it remains to be seen how this project will unfold in light of the legal challenges the company is facing in other parts of Africa.
Conclusion
The Adani Group’s push into Tanzania’s energy infrastructure market, marked by the proposed Ksh. 116 billion ($900 million) deal for high-voltage power lines, signals the conglomerate’s strategic ambition to dominate Africa’s infrastructure landscape. While these investments promise to address critical infrastructure gaps, the group’s history of controversies in Kenya and beyond raises questions about its long-term impact on the continent.
As Adani continues to expand its global footprint, particularly in Africa, it must navigate both legal hurdles and public scrutiny. Tanzania stands to benefit from the proposed power line project if the partnership proceeds smoothly, but Adani’s past challenges suggest that the road ahead may not be without obstacles.
