MP wants answers on Sh350m legal fees, Yeda's tenure at EADB

Matungulu MP Stephen Mule (left). He wants Njuguna Ndung'u to state why EADB shareholders have not been paid any dividends during Ms Yeda's tenure. [Elvis Ogina, Standard]

In November last year, Baringo North MP Joseph Makilap asked the Speaker to order the Committee on Energy to look into whether the signed agreement between Kenya Power and Lake Turkana Wind Power Project plant contributed to high cost of power during Ms Yeda's tenure as chair.

He noted that Kenya Power had paid LTWP plant, the second biggest supplier of electricity to Kenya Power Sh17 billion for power that was not utilised by Kenyans.

In the petition, the MP also questions Yeda's role as chair of the Kenya Power board, raising concerns that the electricity distributor might be conflicted while dealing with LTWP.

"Is it not a conflict of interest that Ms Yeda, the EADB director general, the bank which... financed the project doubles up as the chairperson of Kenya Power? Was the KPLC chair to supervise the repayment of the loan from the bank? On whose interest was the chair appointed at Kenya Power to represent?" posed Makilap in a letter dated October 7.

Yeda was appointed as director and chair of the Kenya Power board in 2020 while LTWP started feeding power to the national electricity grid in October 2018.

LTWP 2017 kicked up a storm after it demanded payment from the government for Deemed Generated Energy (DGE) after the government failed to put up a transmission line ready in early 2017 as agreed.

The wind power energy generator raised a clause in its PPA with Kenya Power that said the firm would be compensated if the state had not delivered a transmission line between Loyangalani and Suswa by the start of 2017.

This would be a penalty for denying the firm an avenue to monetise its investment by selling electricity to Kenya Power.

Treasury Cabinet Secretary Njuguna Ndung'u. [Edward Kiplimo, Standard]

Following the delay, LTWP demanded Sh19.87 billion (EUR167 million at current exchange rates) but in negotiations between the Ministry of Energy, LTWP, and Kenya Power, the penalty was negotiated downwards to Sh17 billion (EUR127.6 million).

The government paid EUR46 million (Sh5.5 billion) while the balance would be recovered from consumers in their power bills. This saw the cost of power from the LTWP plant go up by EUR0.00845 (about Sh1) per unit.

The EUR46 million (Sh5.5 billion) lumpsum that the government to LTWP was however in excess.

Both LTWP and the Energy ministry had explained that the penalty was based on estimates of how much power LTWP could produce as there was no data at the time showing patterns of power generation.

Once power generation kicked off, the data collected showed that the penalty that LTWP had demanded should have been less by EUR6.17 million (Sh734 million).

LTWP tried to refund the money but it kept bouncing back, raising questions about possible underhand dealings.

This is the money the MP wants the House to take a fresh look at.