Government Terminates Portuguese Firm’s Proposal to Build Thuci Dam
The government has terminated a privately initiated proposal by Portugal-based company Elevolution Engenharia, S.A. to finance, design, construct, operate and transfer the proposed Thuci Dam Project.
The Ministry of Water, Sanitation and Irrigation announced the decision in a notice issued on Tuesday, September 15, 2026, following a review and due diligence process undertaken under the Public Private Partnerships (PPP) framework.
The Thuci Dam Project, which traverses Embu and Tharaka Nithi counties, is intended to improve the availability and reliability of water for irrigation by conserving water during periods of adequate rainfall and releasing it in a regulated manner for irrigation.
The Contracting Authority received a Privately Initiated Proposal (PIP) from Elevolution Engenharia, S.A. and Weihai International Economic and Technical Corporation (WIETC) in May 2025.
The proposal covered the financing, design, construction, operation and transfer of the Thuci Dam under the PPP framework.
WIETC later withdrew from the project in October 2025, leaving Elevolution Engenharia, S.A. as the sole project proponent.
The government subsequently disclosed receipt of the proposal to the public through a Public Disclosure Notice dated July 18, 2025, in line with the applicable public disclosure requirements.
Following a preliminary review, the Contracting Authority determined that the proposal met the requirements under Section 40(2) of the PPP Act and forwarded it to the PPP Directorate for assessment.
The proposal was then jointly evaluated by the PPP Directorate and the Contracting Authority.
During the assessment, preliminary due diligence was conducted on Elevolution in accordance with the PPP Act.
The process identified the need for comprehensive due diligence covering the company’s financial, technical, legal and institutional capacity.
The authorities also required physical due diligence and additional documentation and information before the assessment could be completed.
The findings and recommendations were presented to the PPP Committee, which on February 2, 2026, granted conditional approval for the project to proceed to the Project Development Phase.
However, the approval was subject to satisfactory completion of comprehensive due diligence and resolution of outstanding issues.
Physical due diligence was subsequently undertaken to verify whether the proponent had met the conditions required for the project to progress.
The findings from the exercise were later submitted to the PPP Committee for consideration.
The PPP Committee considered the due diligence report and the overall assessment of the proposal during its 61st Ordinary Meeting held on August 26, 2026.
Following its consideration, the committee resolved to terminate the Privately Initiated Proposal submitted by Elevolution Engenharia, S.A. for the Thuci Dam Project.
The committee also directed the Contracting Authority to consider an alternative procurement route for implementing the dam project in accordance with the PPP Act.
In addition, the Contracting Authority was directed to update the feasibility studies for the project and secure an adequate budgetary allocation for viability funding to support further development and implementation of the project.
The decision was communicated publicly in line with the government’s commitment to transparency in the development and implementation of public infrastructure projects.
The Ministry clarified that the termination applies specifically to Elevolution’s privately initiated proposal and does not mean that the Thuci Dam Project itself has been cancelled.
“the termination relates solely to the Privately Initiated Proposal and does not constitute a termination of the Thuci Dam Project itself,” the notice reads.
The government said it remains committed to developing the project through an appropriate procurement route.
However, the project will first require updated feasibility studies, requisite financing, procurement processes and the necessary statutory and regulatory approvals.
The government said these processes will be undertaken in accordance with the applicable laws and policies of Kenya.
The government has been pursuing the development of the Thuci Dam Project as part of efforts to improve water availability for irrigation.
The project was initially proposed for implementation in 2017 under an Engineering, Procurement, Construction and Financing (EPC-F) model.
However, implementation under the model did not proceed due to changes in government policy and limited fiscal space for capital investment.
The government later considered private sector participation through the PPP framework.
The Public Private Partnerships Act, Cap 430 of the Laws of Kenya, provides a framework for private sector participation in the development of public infrastructure.
The framework allows for private sector involvement in the design, financing, construction, equipping, operation, maintenance and transfer of infrastructure projects.
