The National Treasury and the Kenya Electricity Transmission Company (Ketraco) face a crucial test as they assess proposals to undertake four power projects estimated to cost up to Sh65 billion.
Pabari Investments, one of the four firms seeking a multibillion-shilling contract at Ketraco, is battling for survival with a court order keeping Absa Bank Mauritius from pursuing liquidation of the firm to recover a disputed debt.
Pabari Investments has submitted a Privately Initiated Proposal to Ketraco for the construction of four electricity transmission lines and a substation for Sh65 billion.
Three other firms – Encomm Power Rental Solutions Ltd and AEE Power Ventures S.L – have also submitted similar proposals to Ketraco.
For the last five years, the firm’s survival has hinged on a 2021 Mombasa High Court ruling that blocked Absa Bank Mauritius from initiating liquidation of Pabari Investments.
Owners of Pabari Investments are also the shareholders of Kwale International Sugar Company, which the government was ordered to pay Sh24 billion by the High Court last year.
The Court of Appeal in December 2025 allowed Absa Bank Mauritius to appeal a 2021 High Court ruling that prevented it from placing Pabari under liquidation. Pabari rushed to court for rescue in January 2021, after the lender made a move on its assets over an undisclosed debt.
“It is not lost on me that four years on, the Respondent continues to enjoy the injunctive orders issued by the trial court,” the Court of Appeal said in a December 5, 2025 ruling.
The projects in Pabari’s proposal include the 220kV Kiambere - Rabai LILO (Mutomo), the 70km 132kV Mutomo - Makindu, 110km Voi - Taveta 132kV, 150km Rumuruti - Maralal 132kV, and 50km Sotik - Kilgoris transmission lines. They also include the Voi 400/132kV substation and are expected to be constructed until 2031.
This throws a spanner in the process that will make a crucial decision for the projects estimated to cost between Sh50 billion and Sh65 billion, since the law prohibits the government from evaluating a PIP in the case where a company is insolvent or has an ongoing case.
In a section addressing PIPs, the Public Private Partnership (PPP) Act, 2021 also requires the PPP Directorate- domiciled under the National Treasury- to first conduct due diligence to ensure the private party proposing to implement a project has not been debarred elsewhere or engaged in corruption.
“The Directorate, in co-ordination with the contracting authority, shall, before commencing an evaluation of a privately-initiated proposal, conduct due diligence to confirm that the private party is not insolvent, under receivership or bankrupt and its affairs are not being administered by a court or judicial officer, its business activities have not been suspended, and it is not subject to any current legal proceedings,” the Act states.
Ketraco published a public notice regarding the PIP on Tuesday, indicating that it would undergo statutory processes “including evaluation of the proposal, project development activities, stakeholder engagement and negotiations. This public disclosure does not constitute approval of the PIPs.”
The PPP Act requires that once an agency receives a PIP (Ketraco in this case), it submits the same to the PPP Directorate for assessment and approval.
A circular by Treasury last year directed agencies to publish a notification to the public informing it of receipt of a PIP within 14 days.
It is unclear whether the PPP Directorate will proceed to evaluate the proposal in the context of the ongoing liquidation case.
Ketraco on Thursday said the procurement was in its initial stages and that the proposal would be subjected to due diligence.
“The procurement process is currently at its preliminary stage. Formal due diligence on the proponents will be undertaken before the commencement of the detailed evaluation of the proposals. The evaluation process will be conducted jointly by KETRACO and the PPP Directorate,” Ketraco’s acting Managing Director (MD) Kipkemoi Kibias said.
Ketraco acting Managing Director Kipkemoi Kibias.
Photo credit: File | Nation Media Group
Ketraco indicated that the projects proposed in the current process are different from those proposed by Adani Energy Solutions , whose deal was cancelled last year.
He said the three companies submitted individual PIPs and that “each proposal will be independently assessed, subjected to the requisite due diligence, and processed in accordance with the PPP Act, 2021, and its attendant regulations.”
“Due diligence will be undertaken throughout the procurement and project development process to verify the proponents' legal status, technical capability, financial capacity, commercial standing, and compliance with applicable laws and regulations,” Mr Kibias added.
Ownership of Pabari Investments Ltd is also intertwined with the Kwale International Sugar Company Ltd, which has had interesting relationships with the State in recent years.
Official company searches show that the two directors and shareholders of Pabari Investments, Kaushik Chhotalal Pabari and Rejesh Chhotalal Pabari, are also shareholders of the Kwale International Sugar Company Ltd.
Pabari Investments was registered in April 2013 and also shares the official registered offices with Kwale International Sugar Company, at Unifresh Building, Baba Dogo.
The company (Pabari) has also been involved in previous legal disputes with the State, including one where the government was ordered to pay Kwale International Sugar Company Sh24 billion in damages last year.
The High Court awarded the huge damages after declaring that the government breached a sublease agreement, the Kwale sugar firm said it sabotaged a $300 million (Sh39 billion) sugar production project.
The dispute emanated from August 2007 when Kiscol – a joint venture between Pabari Group and Mauritius-based firm, Omnicane – secured a sublease for a 15,000-acre integrated sugar estate in Kwale County. Omnicane is also a shareholder at Kwale International Sugar Company, holding a stake of a fifth of the company.
The land was occupied by squatters, resulting in a dispute that prolonged for years, before the Environment and Land Court ruled several years ago that the Kwale Sugar firm pays them Sh175 million.
In another High Court judgement that awarded Kwale International Sugar Company Ltd Sh24 billion, the court concluded that the government failed to uphold its contractual obligation to provide the sugar firm with “quiet and peaceful possession” of the land it had leased.
During a petition presented by Kwale residents at the Senate to complain of non-payment of the Sh175 million court award by the Kwale Sugar firm in 2024, nominated Senator Tabitha Mutinda made the first public disclosure linking Pabari Investments and Kwale International Sugar Company.
“I have tried to look at who the owners of this Kwale International Company are, who are so top in this world that they cannot adhere to court orders. In my research, I realised that Pabari Investment Company and Omni Care of Mauritius are the owners of this company. Further to that, Rajesh Pabari and Kaushik Pabari seem to be the owners of this company,” Ms Mutinda said.
