Ministry on spot over 54MW Garissa deal
A parliamentary committee wants the Ministry of Energy probed over the 54.6 Megawatts (MW) Garissa solar power plant project funded by Chinese loan.
The committee says the project has no value for money after the Rural Electrification and Renewable Energy Corporation (REREC) took a loan of Sh13.5 billion in 2018/19 to construct the Garissa Power plant whose life span is 25 years against a loan repayment period of 15 years.
The project can only generate a maximum revenue of Sh500 million yearly, implying that after the 15 years loan repayment period, REREC will have paid only Sh7.5 billion meaning it will not be able to repay the loan.
Payment of the remaining principal amount and interest will therefore be shouldered by taxpayers’ money upon failures to break even, adding to the mounting list of debt-funded projects that have remained elusive.
No value for money
“The EACC should investigate the conceptualization and implementation of Garissa Power Plant to ascertain whether there was value for money and prefer charges, if possible, against persons that may be found culpable,” the National Assembly Public Investments Committee (PIC), chaired by Mvita MP Abdulswamad Nassir, said in a report to the House.
The PIC now wants the anti-corruption watchdog to investigate why the energy ministry did not intervene despite REREC indicating to the Committee that it had communicated to the mother ministry. To break even, the project, which sit 15km off Garissa town, was supposed to generate at least 900 million annually to meet the loan repayment period.
Troubled Kenya Power currently owes REREC Sh560 million from the generated energy from the Garissa Power plant.
