The government has confirmed that it will only reimburse Adani Energy Solutions for verifiable costs following the termination of its deal with the Kenya Electricity Transmission Company Limited (KETRACO).
If Adani fails to provide adequate records for due diligence, no payment will be made.
KETRACO has warned that the cancellation of the agreement could significantly delay critical energy projects aimed at reducing transmission losses and addressing power blackouts.
The termination process, which is being carried out in three phases, involves KETRACO, the National Treasury, and a formal communication to Adani Energy Solutions.
The first phase involves the Directorate of Public-Private Partnerships (PPP) and KETRACO, which will prepare a report for the National Treasury.
This report will be submitted to Dr. Chris Kiptoo, Principal Secretary of the National Treasury and chairperson of the PPP Committee.
In the second phase, if the report is approved by Dr. Kiptoo, KETRACO will formally notify Adani Energy Solutions of its decision to cancel the contract, providing reasons for the withdrawal.
In the third and final phase, Adani Energy Solutions will have the option to either seek payment for the assessments it conducted or mutually agree with KETRACO to dissolve the contract.
John Mativo, Managing Director of KETRACO, explained that any verifiable costs, such as those for environmental assessments, would be reimbursed, within the limits set by law.
However, he emphasized that any further claims by Adani could face resistance due to the legal caps in place.
KETRACO, which is grappling with a financing gap of sh 650 billion for 90 pending projects, plans to explore alternative financing options, primarily through local investments.
Mativo suggested that financing could be sourced through local insurance schemes, pension funds, and SACCOs, as these options would allow for quicker execution and less red tape.
The government, which is dealing with strained power lines and increasing energy demands, stressed the urgency of finding alternative solutions to ensure timely completion of energy projects.
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