No funds were lost from cancelled Adani deals; KETRACO
No funds were lost from cancelled Adani deals; KETRACO
KETRACO now says no funds were lost following the termination of Adani deals.
Following the start of the termination process of the Adani Energy solutions and the Kenya Electricity Transmission Company Limited (KETRACO) deal, the government says it will only pay for verifiable costs or not paying the Indian conglomerate at all for not providing sufficient records for due diligence.
Ketraco adds, the cancellation of the deal, will slow down extremely urgent energy projects to address transmission loses and power blackouts.
The cancellation of the deal between Adani and KETRACO has triggered a three-step process, that will involve the electricity company and National Treasury, and culminate in communication to Adani.
The first step: The Directorate of Public-Private-Partnerships and KETRACO, the contracting entity, have kick-started the process, and will issue a report to the National Treasury Principal Secretary Dr. Chris Kiptoo, who also doubles up as chairperson of the Public-Private-Partnerships Committee.
The second step: If the report is approved by the Chairperson, the ball falls on KETRACO’s court, who then officially will write to Adani Energy Solutions, with reasons on pulling out of the deal.
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The third process: Adani Energy Solutions, will in receiving the communication either seek recourse in demanding payment for assessments it undertook or write back and mutually pull out of the contract with KETRACO.
“What we had agreed is that any cost that is verifiable, in terms of the Environmental Assessment Reports, and we know the cost of doing this, can be reimbursed back to Adani. The Law also gives a maximum cap, and vis a vis in terms of arguing for not paying,” John Mativo, Managing Director, KETRACO said.
With 90 pending projects that face a financing gap of Ksh.650 billion, KETRACO says, it will explore other options to finance the project, citing financial constraints the government faces.
“And the quickest investor to come on board, is local financing from Kenya. This can be done through insurance schemes, pension schemes and SACCOs, because it’s the quickest way and due diligence becomes faster and move forward,” Mativo added.
The government says, given strained power lines, power loses and the move toward high voltage lines from the current medium voltage lines, there is need for quick alternative options that will help meet the set deadlines.
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