Kenyan Court Suspends Adani Deal To Run Nairobi Airport

Kenya’s High Court has suspended a government plan to allow India’s Adani Group to manage the country’s main airport following intense local opposition, marking the latest setback to the conglomerate’s overseas expansion.

The court order on Monday to temporarily blocks a government proposal to grant the infrastructure-focused company owned by Gautam Adani, India’s second-richest man, a 30-year lease to operate Jomo Kenyatta International Airport.

The Law Society of Kenya and the Kenya Human Rights Commission, which petitioned the high court, said the estimated $1.85bn in funds needed to revamp the airport could be raised without a multi-decade leasing contract.

“The Adani proposal is unaffordable, threatens job losses, exposes the public disproportionately to fiscal risk and offers no value for money to the taxpayer,” the organisations argued in their legal application. They claimed the deal was “irrational” under Kenya’s constitution.

The Kenyan legal challenge is the latest blow to the Adani Group’s efforts to expand its overseas presence.

 

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The proposed takeover by India’s largest private airport operator sparked protests in Kenya when it was revealed in July, with the police blocking demonstrators who wanted to shut down the airport. The Kenyan aviation workers’ union also opposed the plans, arguing they would lead to local job cuts and the employment of foreigners.

The Kenya Airports Authority said Adani’s proposal to refurbish the facility and invest in a new terminal and runway was needed to spruce up the “ageing infrastructure” at the largest airport in east Africa’s most advanced economy.

Adani has renewed its international expansion efforts, including a port deal in Tanzania this year, after damaging fraud allegations levelled at the company by US short seller Hindenburg Research, which the group has repeatedly denied.

The tycoon’s conglomerate has developed its businesses in tandem with infrastructure goals set by Indian Prime Minister Narendra Modi. But Adani’s overseas deals have been criticised and faced setbacks. The group pulled out of Myanmar following its 2021 coup, while its ports and energy agreements in Sri Lanka and Bangladesh have fuelled local resentment.

India’s main opposition party has said Modi’s government uses its diplomatic might to advance Adani’s international interests, while politicians in countries such as Sri Lanka have raised concerns about the procurement process.

“The Adani Group’s proposed takeover of the airport in Nairobi, Kenya, has led to widespread protests in the country,” Jairam Ramesh, a spokesperson for the opposition Indian National Congress, said last week. “The protests can therefore easily convert into anger against India and the Indian government.”

An agreement by Adani to supply Bangladesh with coal power from a plant in India, following a visit by Modi to Dhaka in 2015, has been criticised by activists who say the imported electricity is prohibitively expensive.

Adani has said the cost is competitive, but recently warned that a $500mn payment backlog by Bangladesh’s new government had become “unsustainable”.

Adani and India’s government have denied the conglomerate benefits from undue favouritism. Adani Group did not immediately respond to a request for comment.

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