Kenya Power is facing serious scrutiny after a government audit revealed inflated costs and payments for services that were never delivered in an off-grid power project, putting taxpayers at risk of losing over Sh60 million.
The audit exposes payments made for structures that already existed and purchases of generators whose prices show glaring inconsistencies, raising questions about financial oversight in the State-backed initiative.
The findings relate to the Hybrid Generation of Off-Grid Power Systems, a project launched in August 2016 with funding from the French Development Agency to supply electricity to communities outside the national grid.
The project is scheduled to conclude in June and has a Sh3.73 billion loan component, with Kenya Power responsible for establishing and running the off-grid stations.
Auditor-General Nancy Gathungu flagged that Kenya Power paid Sh36.2 million to a joint venture of Hyperteck Electrical and MPMC Powertech for temporary structures and facilities that were either overvalued or already present before the contract began.
The contract covered the design and installation of diesel-solar hybrid plants at four stations in Eldas and Habaswein (Wajir), Elwak (Mandera), and Merti (Isiolo).
“However, physical verification at Habaswein and Eldas stations revealed that the structures erected at a cost of Sh6,234,414 were made of iron sheets, and were of a lower value than the stated cost which had been authorised for payment," Ms Gathungu stated.
The audit further noted that sanitary and sewage systems, along with water treatment facilities budgeted at Sh23,878,341, were already available on site, with only a pit latrine added by the contractor. “which indicated that the facilities were not constructed by the contractor, despite approval of the payment.”
Concerns also emerged over generator pricing. The Eldas station’s 320 kilowatt generator was priced at $420,825.30, while Elwak’s larger 1,096 kilowatt generator cost $121,265.22, and Habaswein’s 872 kilowatt unit went for $119,959.92.
At current exchange rates, the smaller Eldas generator cost about Sh54.3 million, far exceeding the Sh15.6 million spent on the bigger Elwak unit.
The audit pointed out that there was no documentation or justification for such wide price differences, making it impossible to determine if public funds were used efficiently. Major equipment delivery and construction were expected to be finalized by December.
The Hybrid Generation of Off-Grid Power Systems project was designed to deliver reliable and clean electricity to marginalized communities, with Kenya Power responsible for constructing and running the off-grid stations to complement the national grid.
