The African Development Bank (AfDB) has withdrawn funding for a geothermal power plant in Nakuru following revelations that Baringo Senator Gideon Moi has bought a substantial stake in one of the firms awarded the contracts.
Moi bought the Sosian Menengai Geothermal Power stake from tycoon Narendra Raval, making him (Moi) the majority shareholder.
Initially, Mr Raval had acquired the company from the Moi family. He had bought it through an entity called Sosian Energy in 2017. Raval admitted that he sold the company back to Moi, but at a lower price than he had bought it.
“I sold back my stake in Sosian at a lower price than I had bought it. Gideon Moi is the majority owner,” Ravel told a local business newspaper.
Sosian Menengai Geothermal Power was one of the three companies awarded a contract by the state-owned Geothermal Development Company to develop the 35-megawatt geothermal power plant in Menengai under a build-own-operate model.
“The bank is currently engaged on the Quantum Power East Africa (QPEA) project only. It has previously been engaged on the Sosian project as well but it requires a change in shareholding before it can engage further. The delays have primarily been due to negotiation of the finance documents between the lenders and sponsor, closure of certain bankability issues with the government agencies and change in the sponsor of the project,” said a source quoted by Business Daily.
AfDB now wants ownership of the firm changed before it can offer to fund Sosian Menengai Geothermal Power.
New York Stock Exchange-listed Ormat Technologies and Quantum Power are the two other firms selected to build a 35MW steam power plant each on a public-private partnership basis.
The three firms were picked in mid-2014, but substantial works on the power plants are yet to kick off.
“The three independent power producers to construct 105 megawatt (MW) power plants are yet to attain financial closure with their lenders,” the Treasury told Parliament previously.
GDC was to take care of upfront risks and then invite private sector players to construct, own and operate the plants for 25 years.