Energy PS, predecessor on the spot over wind power project
Energy Principal Secretary Joseph Njoroge and his predecessor Patrick Nyoike are on the spot over the approval and execution of the multi-million-shilling Lake Turkana Wind Power (LTWP) project that was expected to increase the country’s power generation.
The duo were dragged in the project as Auditor General Nancy Gathungu recommended that top officials be held accountable for allowing a non-competitive process in identification and implementation of the project.
She said their action led to lack of fairness, transparency, equity and cost effectiveness.
In a special audit report tabled in the National Assembly last week, Gathungu revealed that Njoroge, who was the then Managing Director of Kenya Power and a member of the board at the time LTWP executed the Power Purchase Agreement (PPA) yet the former had not obtained a license to generate electric power as this was granted almost a year later after the agreement was executed.
A PPA is the primary contract between the public and private sector parties which underpin a power sector with utility firm Kenya Power.
On the other hand the report noted that Nyoike was a member of the board at the time of signing the PPA, sourcing and engaging the LTWP.
“The special audit, therefore, notes with concern that a Power Purchase Agreement was executed between LTWP and KPLC on January 29, 2010, before LTWP Limited had obtained a licence to generate electric power, which was granted almost a year later on December 16, 2010 after the Power Purchase Agreement was executed,” reads the report.
The revelation came even as it emerged that the government has so far paid Sh10.2 billion as penalties to LTWP investors out of the total Sh18.5 billion it is owed because of delays in completion of the Sh30.2 billion 428-kilometre high-voltage transmission line from the Lake Turkana wind turbines to Loiyangalani in Suswa sub-station in Narok, which is the country’s main interchange for electricity coming from different sources.
The Ministry of Energy acting on behalf of the government constructed the 428 kilometre transmission line from Loiyangalani to Suswa to actualise the requirements of the PPA to enable evacuation of power from the wind field.
Gathungu said consumers have been bearing the brunt of footing the balance of Sh9.8 billion as LTWP started recovering this money through a tariff increase by Kenya Power from June 1, 2018 and is expected to end in May 31, 2024 which is the recovery period.
The completion delays of the deemed generated energy, the amount of energy, expressed in MWH, that the facility would have produced and delivered to the point of delivery, delayed according to LTWP claim.
“As noted by LTWP limited, due to delays in completing the transmission line, generated power was not evacuated from the LTWP ltd plant resulting in accrued penalties to GOK referred to as Deemed Generated Energy (DGE) claims amounting to Sh18, 499, 672 for the period 27 January 2017 to 10 September 2018,”reads the report.
Kenya Electricity Transmission Company (Ketraco) completed the transmission line on September 24 , 2018 which was a 21-month delay in transmission of generated power as the company contracted for the transmission line M/s Isolux Ingeniers SA had become bankrupt yet the project developer LTWO had completed the power generation plant in January 2017