Kenya Power acting Managing Director Rosemary Oduor when she appeared before National Assembly's Public Investments Committee at Parliament Buildings on February 16, 2022.
| Jeff Angote | Nation Media GroupCompanies
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Sh785m taxpayers’ money lying idle at wind power firm
Lawmakers have upped the ante in their quest to expose the real beneficiaries of the excess payment of about Sh10 billion made in 2020 to Lake Turkana Wind Power (LTWP) for idle power.
Kenya Power acting Managing Director Rosemary Oduor was at pains on Wednesday to explain why the company had not furnished LTWP with the correct bank account details to facilitate a refund, more than a year since the payment was made.
She appeared before the National Assembly’s Public Investments Committee (PIC), chaired by Mvita MP Abdulswamad Nassir, to explain how Kenya Power entered into a power purchase agreement with LTWP.
“How long does it take for Kenya Power to provide the correct account details, because someone is earning interest on money in that account. Who is earning this interest?” fired Kaloleni MP Paul Katana.
Embakasi East MP Babu Owino also questioned who the beneficiaries of the interest accruing on the overpayment are and why the Ministry of Energy has taken more than a year to provide the correct bank details.
“You have to tell this committee who is earning the interest on the money. You might be innocent (yourself) but you must unmask these people,” Mr Owino told the Kenya Power boss.
Baringo Central MP Joshua Kandie said: “If that money was deposited in an account earning an interest of about 10 per cent, the money has already accrued interest of over Sh70 million by now.”
Ultimate beneficiary
The refund was wired into a Central Bank of Kenya (CBK) account in Frankfurt, Germany. The account is held at Standard Chartered Bank.
But Standard Chartered Bank returned the money citing a lack of sufficient details of the ultimate beneficiary of the millions of shillings paid to the CBK account.
Ms Oduor did not answer the MPs’ queries on the ultimate beneficiaries of the money in the LTWP account but said Kenya Power last month wrote a letter to the Ministry of Energy to seek the additional details required for the refund to be processed.
The committee has summoned the Energy ex-CS, Kenya Power and Ketraco bosses who were at the helm when the LTWP agreement was signed to appear before it, as well as current Energy Principal Secretary Gordon Kihalangwa.
Ms Oduor told the committee that while the government was to pay the money directly to LWTP, the state instead paid it to Kenya Power, which wired it to the wind firm.
“GoK DGE (deemed generated energy) were expected to be paid directly to LTWP. (But) on different occasions, GoK through the National Treasury sent money to KPLC for the settlement of GoK TI (transmission interconnector) Delay DGE,” she told the committee.
But reviews made after the payment showed that the deemed electricity generated by LTWP was actually lower than what it charged the government, which meant the firm was paid an extra €6.173 million (Sh785 million) that it was supposed to refund.
It is this refund that has resulted in a ping-pong game, with LTWP maintaining that it has repeatedly requested but has not been given the correct account number to send the money to, even as it continues to accrue interest.
Capital-intensive projects
The committee asked Kenya Power why it pressed ahead with the wind power project even after the World Bank withdrew its guarantee.
The World Bank bolted out of the project after expressing concerns that based on its knowledge of capital-intensive projects in Kenya, it was unlikely that the fully state-owned Ketraco would complete the power line in time and consumers would pay billions of shillings for idle power.
Records at the Registrar of Companies seen by the Nation show that LTWP (number C.105671) was registered on September 12, 2003 as Five Eighty Investments Ltd, with an address at ALN House on Eldama Ravine Close in Westlands.
On September 9, 2005, Five Eighty Investments officially changed its name to Abraasa Ltd, which also later changed its name to Turkana Wind Power Ltd a year later on September 18, 2006.
Turkana Wind Power finally changed its name to its current iteration, Lake Turkana Wind Power, a year later on October 1, 2006.
The company has 3.458 billion issued shares held by London-registered Anergi Turkana Investments Ltd, Nijmegen-registered KP&P Africa B.V, Mauritius-based Sandpiper Ltd and the Finish Fund for Industrial Cooperation Ltd.
LTWP’s other shareholders are Vestas Eastern Africa Ltd, the Danish Climate Investment Fund I K/S and the European Investment Bank, which holds one share.
