Kenya Electricity Generating Company (KenGen) was on Tuesday put on the spot over a disputed 12-acre parcel of land valued at Sh550 million, stalled energy projects, and questionable financial records.
The grilling took place before the National Assembly’s Public Investments Committee on Commercial Affairs and Energy, chaired by Pokot South MP David Pkosing. The lawmakers questioned KenGen’s Managing Director and CEO Peter Njenga over audit queries flagged by the Auditor-General covering the 2020/21 to 2022/23 financial years.
One of the key issues raised was KenGen’s Sh6.8 billion in right-of-use assets, with Sh5.89 billion tied to leasehold land. Among them was a 12.39-hectare parcel whose lease expired in 1991 and whose title documents had gone missing for years. MPs demanded to know why the company had not resolved the matter earlier.
Njenga explained that the delay was caused by a legal fee dispute between Kenya Power and its lawyer, which had prevented the title transfer. He said the issue had now been resolved and that a new 50-year lease had been signed with the Ministry of Lands on March 27, 2023. KenGen received a new certificate of title on April 5.
But some MPs, including Laikipia East MP Mwangi Kiunjuri, questioned why the lease was limited to 50 years instead of the standard 99. He demanded that the original title deed be submitted to the committee within two weeks.
Committee Chair Pkosing instructed KenGen to submit a detailed report on the land dispute, the new lease agreement, and reasons for the delay.
The MPs also raised concerns about discrepancies in KenGen’s financial dealings with Kenya Power and the Geothermal Development Corporation (GDC). According to the Auditor-General, KenGen had reported Sh23.58 billion in receivables from Kenya Power, while Kenya Power reported a lower figure of Sh23.15 billion—leaving a Sh435 million gap. A similar mismatch of Sh74.5 million was flagged in balances between KenGen and GDC.
Njenga told the committee that the figures had since been reconciled. As of June 30, 2023, KenGen’s reconciled receivables from Kenya Power stood at Sh22.56 billion, while the GDC balance issue had also been resolved.
Another issue was the status of the Olkaria IV and AU substations, which were completed in 2015 and valued at Sh4.59 billion but are still listed under KenGen’s ownership. MPs wondered why the substations had not been transferred to the Kenya Electricity Transmission Company (KETRACO), despite being operational.
In his response, Njenga said the National Treasury had taken over the debt tied to the two substations and signed a subsidiary loan agreement with KETRACO on June 28, 2024. The Treasury assumed responsibility for a €36.9 million loan from the European Investment Bank that was used to fund the projects.
Lawmakers also took issue with Sh623 million spent on feasibility studies for energy projects, with no visible results. They were particularly concerned about Sh378 million spent on studies conducted between five to ten years ago, which have yet to translate into actual power projects.
Pkosing directed KenGen to provide full feasibility reports for the Meru Wind Phase 1 project, along with project details for Ngong I Phase 3 and the Karura Hydropower Project. He asked for the names of contractors, turbine suppliers, and cost estimates.
“We must determine if taxpayers are getting value for their money. It is unacceptable for expensive studies to sit on shelves while Kenyans continue to suffer blackouts and exorbitant electricity bills,” Pkosing said.
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