Kenya sued by Obama-linked firm over Sh15b power project

Energy Principal Secretary Joseph Njoroge 

A company associated with US President Barack Obama's Power Africa initiative has sued Kenya over a Sh15 billion wind farm.

Kinangop Wind Power (KWP) has dragged Kenya to the International Chamber of Commerce (ICC) where it is demanding compensation after it failed to agree with landowners on the intended site of the wind farm.

Compensation for such failed projects is calculated as a portion of the value, in this case Sh15 billion. Officials from the Ministry of Energy acknowledged the demand but said they were uncertain what the exact monetary value of the claim by KWP was.

The botched project was expected to contribute to the 7000MW committed by the US to light up Sub-Saharan Africa under the Power Africa initiative.

The firm has started disposing of the project assets including wind masts and turbines that would have been used to harness electricity on the disputed land. But the office of the Attorney General is fighting disposal of the equipment in a counter-suit filed in a Nairobi court where the company has been accused of acting out of malice.

Political risks

The Kenya Government had promised to cushion the project from political risks.

In an affidavit, Energy Principal Secretary Joseph Njoroge said: "There was no occurrence of a political event to warrant the transfer and the dispute before the ICC has arisen due to a private dispute between the community situated at the project site."

The PS said there had been no political interference as defined in the initial agreement, but rather, the firm had only failed to convince landowners to agree to leases.

KWP is the smallest of the four renewable power projects in Kenya that received funding following President Obama's endorsement.

Others are the Sh110 billion Late Turkana Wind Power and Kipeto Wind and African Geothermal International Limited in projects worth Sh30 billion and Sh60 billion respectively.

At the heart of the legal dispute is whether KWP was right to dispose of the wind power equipment after the failed project, while demanding compensation in a parallel arbitration lodged before the Paris-based ICC.