Litigation challenge Lake Turkana wind power line construction

Last Updated 8 years ago by Kenya Engineer

Spanish firm Isolux Ingeniera SA has moved to court to try and salvage its KES 17.4 billion deal to construct the electricity transmission line intended to take up power from the Lake Turkana wind power (LTWP) plant to Suswa. This is in response to the termination notice by Kenya Transmission Company (Ketraco).
The Kenya Transmission Company issued Isolux with the termination notice on August 14. In July 2017 Spanish infrastructure group Isolux Corsán, the contractor building the Lake Turkana Wind power transmission line filed for bankruptcy over a Sh153.6 billion debt throwing into doubt timely completion of their projects, including this in Kenya.
Isolux claims that the termination notice is unlawful and wants the High Court to suspend Ketraco’s decision. The firm further wishes that the High Court should block Ketraco from cashing in on bank guarantees totaling over KES 2.4 billion that Isolux issued in the State agency’s favor through Bank of Africa, Ecobank Kenya, Ecobank Nigeria and KCB. KCB and Ecobank Nigeria have already paid KES 1.7 billion to Ketraco, which Isolux wants the High Court to freeze until its dispute is resolved. Ketraco has filed an objection to the suit, arguing that owing to the bankruptcy proceedings in Spain Isolux needed to seek the Kenyan courts’ permission before filing such a case.
LTWP, the largest wind farm in sub-Saharan Africa is meant to add 300-megawatt of reliable, low cost wind energy to the national grid and should have been launched in June 2017 were it not for a lack of transmission lines. State-run Kenya Transmission Company (Ketraco) said the line had been 60 per cent completed by last March. Isolux was initially expected to complete the power line by the end of 2013.
In March, Energy Cabinet secretary Charles Keter gave a June deadline for the completion of the line, saying the government had moved in to pay subcontractors and suppliers owed by the Madrid-based Isolux, which bagged the tender for the 428-kilometre high-voltage line in 2011.
The developers of Lake Turkana Wind Power project have started billing Kenya Power every month for its failure to distribute their production due to lack of a transmission line. This is despite recent discussions between Energy ministry officials and the wind farm managers to delay the billing that would ultimately be passed on to consumers. The government had agreed to pay the owners of the wind project a monthly compensation of KES 700 million should there be delays in injecting power to the grid.