Kenya Power shifts blame to Energy ministry over Sh790 excess payment

Kenya Power says the Energy ministry is to blame for the delayed collection of Sh790 million refund from Lake Turkana Wind Power.

The wind farm investor was to return the money, which resulted from excess payments for deemed generated energy.

Taxpayers were charged for idle power following delayed completion of a transmission line to evacuate power from Loyangalani wind plant.

Acting Kenya Power CEO Rosemary Oduor told MPs at the Public Investments Committee on Thursday that the ministry was the one that engaged the investor.

She told the committee chaired by Mvita MP Abdulswamad Nassir that the power utility, though standing to benefit from the refund, the ministry was to be the recipient of the same.

“The amount was due to the Energy ministry. There was consultation between the Energy ministry and Kenya Power. The ministry is the one with the correct details of the bank,” Eng Oduor said.

This was even as MPs asked her to justify why her office took almost a year to respond to inquiries by LTWP on where to deposit the excess payment.

Whereas LTWP wrote on December 2020 seeking bank details to wire the money, Kenya Power responded on November 8, 2021,

The firm followed up in January stating that it was given wrong bank details and was given a response two weeks later but without the required details.

“The indication was that additional details were required so they were needed to complete the transaction,” Oduor said.

She said the issue of the deemed generated energy also rests with the Energy ministry and that Kenya Power only comes in by virtue of being the implementing agency.

Even as LTWP is seeking to remit the refund, MPs have questioned whether the investor should have been paid in the first place.

They cited conflict of interest on the part of LTWP amid revelations by Kenya Power that it floated the bids for the TI connector.

“The conflict here is that where one company fails, another one benefits. KPLC is the one that was doing the lines,” PIC chairman Abdulswamad Nassir said.

It also emerged that LTWP was the lead in the task force that was formed to oversee the implementation of the project.

“Why didn’t you put a clause that when the company LTWP invited failed, they were the ones to be charged?” Nassir asked.

“Why was Isolux and Kema procured by LTWP and not KPLC? Who thought of the task force instead of KPLC doing this and put the beneficiary of the line as the lead?” the PIC chair added.

He cast doubt on the submissions by Kenya Power saying the CEO may have not generated them but only appended her signature.

On the delayed refunds, Maragua MP Wamaua asked: “How much does it cost to locate the account number? How could you have given an account that does not exist? Who is enjoying the interest earned from the money?”

Katana added, “I can excuse the CEO on the technicalities of the agreement but not on the letter on correct account details that takes a whole year to reply? Over Sh700 million is not pocket change. We want to know who is behind this.”

It also emerged that the World Bank in 2012 warned that the construction of the line would delay citing the 26 months that were allocated for the works.

“We remain concerned about time allocated for the TI. We believe the time is inadequate given our experience with Kenya. There is a real risk the project would be a stranded asset with no let up for KPLC compensation,” the Bretton Woods institution said.

Oduor told MPs that much as they were working together, it was LTWP that floated the bids from which a broke Spanish firm – Isolux Ingeneria, was awarded the contract.

MPs want Kenya Power to disclose in its appearance on February 16, the names of persons at the centre of the delay, those who drafted the contract, the brains behind the project, and how LTWP came to engage the contractor.

They demanded answers on who between Kenya Power and Lake Turkana Wind Power drafted the original Power Purchase Agreement (PPA).

“It looks like Lake Turkana were the ones who initiated the tender for the construction of the transmission line,” Nassir said.

“What we are dealing with is that someone drafted the contract and amended the same,” the Mvita MP added.

Oduor sought more time to confirm the correct details of the claim saying the power utility shared the role with the other contracting party.