The National Treasury has disowned a deal that saw Standard Chartered Bank in Frankfurt, Germany, reject Sh. 785 million that was wired into a Central Bank of Kenya (CBK) account by Lake Turkana Wind Power (LTWP). The money had been wired to the CBK account as a refund for excess pay of idle power charges paid in 2018 by Kenya Power.
The refund was rejected by the German bank over what it termed as a lack of sufficient details regarding the ultimate beneficiary of the money that was to be deposited into the CBK account. The bank also demanded the supporting documents for the payment to be presented. This came in the wake of increased oversight by German financial regulator BaFin for money laundering breaches.
However, the National Treasury Principal Secretary Julius Muia has come out to say that he was not aware of the overpayment to Kenya Power or the decision to refund the money through a CBK account in Frankfurt, Germany.
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“I am not aware and would have to check that. I will need more time,” Dr. Muia told the National Assembly’s Public Investments Committee (PIC).
However, it was quickly noted that the PS was aware of the deal as he was copied in three separate letters from LTWP informing Kenya Power of the excess payment and the German transaction.
LTWP says it transferred the cash to the Frankfurt account in December 2021 after Kenya Power provided the CBK account details for the transaction. However, Standard Chartered Bank in Germany rejected the cash and returned it to LTWP account.
LTWP has tabled a letter in Parliament which it says it sent to Kenya Power in regard to its frustrations over the Sh. 785 million refund. It added that since December 23, it has contacted Kenya Power three times and the CBK twice in search of the documentation supporting the transfer of the overpayment. However, the CBK has remained silent over the matter and instead shifted the issue to the Ministry of Energy.
The payment followed delays in the construction of the transmission station to evacuate power from the 40,000-acre Loyalangalani wind farm in Marsabit County to the national grid.
According to reports, LTWP received 45,197,003 Euros (Sh. 5.7 billion in 2021) when what was due to it was 39,023,703 Euros (Sh. 4.9 billion), creating the excess of 6,173,296 Euros (Sh. 785 million). LTWP commissioned its 310 megawatts power plant on January 27, 2017, but the government, which built the evacuation line, did not complete the works until September 24, 2019.
The overpayment has also raised questions on why Kenya Power could have made such a glaring financial error involving close to Sh. 1 billion inadvertently.
