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The Kenya Forum | Lake Turkana Wind Power Ksh18,499 Billion Fraud Allegations - The Kenya Forum

August 12, 2023

Summary

Investigations established that the contract between Kenya Power and Lighting Co. Limited (KPLC) and Isolux Inginieria S.A. (Isolux), resulted in a loss of KSh. 18 billion and increased electricity tariffs.

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Lake Turkana Wind Power Ksh18,499 Billion Fraud Allegations

Lake Turkana Wind Power Ksh18,499 Billion Fraud Allegations

Ethics and Anti-Corruption Commission (EACC) investigation

The EACC has mounted an inquiry into allegations of irregular award of contracts for the implementation of the Lake Turkana Wind Power Project and subsequent payment of KSh. 18,499,082,672.00 to M/S. Lake Turkana Wind Power Limited by various government agencies between the years 2005 and 2019.

The Commission received a report from the Public Investment Committee (PIC) of the National Assembly on procurement irregularities, contract mismanagement and fraudulent payments touching on the contract for the construction of 400KV Transmission Interconnector power line from Loiyangalani to Suswa and related works.

Investigations established that the contract between Kenya Power and Lighting Co. Limited (KPLC) and Isolux Inginieria S.A. (Isolux), resulted in a loss of KSh. 18 billion and increased electricity tariffs.

Investigations further revealed that in 2005, Lake Turkana Wind Power (LTWP) Limited, leased 150,000 acres of land in Marsabit, Northern Horr Area to put up a wind power generation plant.

Power Line not Completeted

In 2006, LTWP Limited carried out a feasibility study in Loiyangalani Area and established that the area had a potential for production of renewable energy. LTWP Limited then proposed a wind power generation plant to the Government of Kenya (GOK), who took up the said proposal. KPLC entered into a Power Purchase Agreement (PPA) with LTWP Limited on 29th January, 2010 for the development of the Wind Power Plant (the LTWP Project). Among the terms of the PPA were that LTWP Limited would generate 300MW of electricity, and that KPLC would be the sole off taker (consumer) of that power. However, a 400 KV Transmission Inter-Connector Line (T.I. Line) needed to be constructed from Loiyangalani to Suswa Sub-Stations, so that this generated power could be transported to the National Grid in Suswa Sub-Station. Further that, if LTWP Limited finished developing the Power Plant and started generating power, they would start charging for the power, whether KPLC were evacuating that power or not, from the date of commissioning. The T.I. Line was to be constructed by Kenya Transmission Company (KETRACO) and LTWP Limited.

Investigations reveals that, the construction of the T.I. Line was incomplete, and as a result, LTWP Limited charged GOK KSh. 18,499,082,672/- for the Deemed Generated Energy. Further investigations revealed that public officers were involved in contractual fraud and money laundering.

A report was compiled and forwarded to the DPP on 5th June 2023 recommending that the suspects be charged with:

• Conspiracy to commit an offence of economic crime contrary to section 47A (3)

• Fifteen counts of abuse of office contrary to section 46, conflict of interest Contrary to section 42(3)

• Two counts of wilful failure to comply with the law relating to procurement Contrary to section 45 (2) (b)

• Deceiving Principal contrary to section 41 (2)

• Fraudulent acquisition Contrary to section 45(1)(a) all as read with section 48 of ACECA
• Three counts of Money Laundering contrary to section 3

• Six counts of Acquisition of Proceeds of Crime contrary to section 4 both as read with section 16 of the Proceeds of Crime and Anti-Money Laundering Act, 2009

• And Neglect of official duty contrary to section 128 as read with section 36 of the Penal Code.

The DPP’s response is awaited.

[Source, Kenya Gazette, EACC/FI/INQ/31/2022]

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