Kenya will ask firms to reveal their litigation history and anti-corruption oaths before they are contracted for unsolicited public-private partnership (PPP) in the aftermath of the cancellation of Adani’s Sh2.7 billion deals and in response to World Bank pressures.
Each firm or a member of a consortium will be required to reveal previous and ongoing legal tussles under the newly proposed Public Private Partnerships (Project Management) Regulations of 2026, which is partly the product of the World Bank push for transparency.
The multilateral lender warns that the so-called Privately Initiated Proposals (PIPs) could undermine public confidence in the search for private investors to build infrastructure, triggering protests that could turn deadly. With the government running out of space to tap additional loans, it has turned to deep-pocketed private investors such as India’s billionaire Gautam Adani to close mega infrastructure projects and recoup their investments through avenues such as tolling.
President William Ruto in November 2024 ordered the cancellation of Adani’s deals, building of electricity transmission lines and upgrading of Jomo Kenyatta International Airport (JKIA), after group founder Gautam Adani was indicted in the United States for allegedly paying about $265 million (Sh34.2 billion) in bribes to Indian government officials.
The US Department of Justice dropped criminal charges against Adani in May this year, after the Indian billionaire agreed to settle a separate civil case.
Kenya wants firms seeking PPP deals to reveal this kind of legal spat for guidance on the approval of the contracts.
‘A private party or consortium of private parties, shall, for purposes of undertaking a detailed assessment of the due diligence elements…shall provide…its litigation history or that of the consortium and its affiliates, and the measures that the private party or each member of the consortium took or intends to take to mitigate escalation of the disputes, if any,’ reads part of the proposed regulations.
The proponent of an unsolicited deal will be required to also disclose its corporate and governance structure, prove that it has not been debarred or disqualified by any country or international organization from participating in PPP deals, and give a notarized declaration that it is not corrupt or has engaged in acts of corruption.
The World Bank Group recently cautioned Kenya against seeking unsolicited PPP deals following the cancellation of two contracts linked to Adani Group companies.
The multilateral noted that the privately initiated proposals (PIPs) could undermine public confidence in the search of private investors to build infrastructure, triggering protests that could turn deadly.
The lender instead encourages Kenya to seek competitively sourced PPPs amid concerns that unsolicited deals are shrouded in secrecy, leading critics to believe that the contracts do not offer taxpayers value for money.
‘I think with PPPs, it’s very clear. International good practice leans on competitive tendering and I think the same applies to Kenya,’ Marek Hanusch, the lead economist for the World Bank’s economic policy in Kenya, said previously.
He echoed comments captured in a biannually published report by the bank on the country’s economic outlook.
‘Going forward, the country’s success in PPP projects will depend on putting in place good governance, oversight, planning and accountability…including strengthening of practices around unsolicited project proposals to foster predictability and confidence in PPP project development,’ the World Bank said.
The freshly published regulations are a requirement by the World Bank, if Kenya is to continue having access to loans under the development policy operations (DPO) option.
One of the triggers to unlocking further funding under a third DPO disbursement is the adoption of PPP regulations, restricting the use of unrestricted proposals.
In late June, the World Bank approved a $750 million budget-support loan for Kenya and a $500 million sustainability-linked facility that will cut the country’s reliance on expensive domestic debt and bolster economic reforms.
Under the regulations, a firm that submits a privately initiated proposal for a project shall demonstrate why the project is not suitable for competitive bidding, including showing where there is an urgent need for continuity in a project which would render a competitive procurement process impractical.
The firm must also prove that it’s the only company capable of undertaking the project or show that its proposal is anchored on unique elements.
The increased use of PPPs to finance infrastructure projects is aimed at reducing the use of debt and taxes to build roads, airports, power plants and electricity transmission lines
Public debt went up following five years of increased borrowing, making it sustainable. Under PPP deals, private financiers build roads and recoup their investments through avenues such as tolling.