× Business BUSINESS MOTORING SHIPPING & LOGISTICS DR PESA FINANCIAL STANDARD Digital News Videos Health & Science Lifestyle Opinion Education Columnists Moi Cabinets Arts & Culture Fact Check Podcasts E-Paper Lifestyle & Entertainment Nairobian Entertainment Eve Woman Travelog TV Stations KTN Home KTN News BTV KTN Farmers TV Radio Stations Radio Maisha Spice FM Vybez Radio Enterprise VAS E-Learning Digger Classified Jobs Games Crosswords Sudoku The Standard Group Corporate Contact Us Rate Card Vacancies DCX O.M Portal Corporate Email RMS
×

Geothermal Development Corporation denies taking loans to finance activities

NEWS
By Geoffrey Mosoku | Mar 18th 2014 | 2 min read
By Geoffrey Mosoku | March 18th 2014
NEWS

By Geoffrey Mosoku

Nairobi, Kenya: The Public Investment Committee was Tuesday told that Geothermal Development Corporation (GDC) has not taken any loan from financial institutions or donors.

Instead, GDC informed MPs that the corporation is fully funded by exchequer since its inception in 2009 and does not have its own revenue to repay loans.

CEO Silas Simiyu told the Adan Keynan led PIC that although the corporation may benefit from loans rendered to the state, the parastatal only receives the same from government as a grant.

Dr. Simiyu said that GDC has since received Sh52 billion both from donors and exchequer during its five years of existence.

The monies include 23.21 billion from donors and 28.61 billion shillings from the government. “GDC receives funding from the Government of Kenya in terms of exchequer annual budgetary allocations and grants from loans procured by GoK. GDC does not have the financial capacity to secure loans,” Dr. Simiyu added.

The MD had been summoned by the committee following media reports on boardroom wars between him and newly appointed chairman Simon Gicharu.

Gicharu, who is also the chairman of Mt. Kenya University, had raised issues of alleged irregularities in procurement and mismanagement through his letter to the head of civil service Joseph Kinyua on March 5.

The chairman and his board who were due to appear before the committee last evening  had also sought Kinyua’s intervention to suspend all the loans and grants until a full audit is conducted to establish the financial prudence of GDC.

However, the GDC boss defended the corporation from any irregularities saying all its procurements were done in accordance to the laws. Vice Chairman Kimani Ichungua asked the CEO to explain how they decided to procure three rigs worthy USD64.8 million yet they had only advertised for two rigs.

Simiyu explained that the variance occurred after they realized that they had a surplus of about USD31 million when they awarded the contract to Sichuan Honghua Petroleum Equipment of China.

The committee ordered the CEO to return after two weeks with all documents to ascertain his explanation that the procurement of the extra rig was approved by the board and had met the procurement rules.

During the appearance, the GDC boss told MPs that for the first time, the corporation will start receiving revenue from steam generated with KenGen expected to pay them Sh4 billion by end of the year.

Currently GDC has about 59 Olkaria wells in with over 409 megawatts while they expect to get an extra 100 megawatts from Menengai by end year.

“As drilling progresses, GDC expects to avail 100MW steam potential to be sold to Independent Power producers for electricity generation. It’s expected that sale of steam to the IPPs will be from December 2014,” he added.

Share this story
CBA deploys NetGuardians IT solution to guard against fraud
In order to enhance data security and further enhance its capabilities to mitigate against risk of fraud, Commercial Bank of Africa (CBA) has selected the software solution of NetGuardians, a Swiss-based software firm with a global client base.
China rejected Kenya's request for Sh32.8b debt moratorium
China is Kenya’s largest bilateral lender with an outstanding debt of Sh692 billion.
.
RECOMMENDED NEWS
Feedback