Kenyans Will Not Lose A Coin, Mbadi Defends Cancellation of Sh337bn High Grand Falls Dam Project as Lawful

Treasury Cabinet Secretary John Mbadi has defended the government’s decision to cancel the Sh337 billion High Grand Falls dam project, dismissing claims that taxpayers could lose billions of shillings from the termination.

Speaking on Wednesday, Mbadi assured Kenyans that no financial liability exists for the government following the cancellation of the mega infrastructure project that was set to be built along the Tana River by UK firm GBM Limited.

“Under the Public Private Partnerships framework, no obligation arises until a binding PPP Project Agreement approved by the PPP Committee is signed by project parties. We wish to confirm that no project agreement was signed for this project, and therefore no such liability exists for the government,” Mbadi stated in a press release.

The Treasury disclosed that the government approved termination of the project in the first week of July 2025, citing failure to meet key requirements in the Project Development Report submitted by the consortium.

The High Grand Falls project, originally conceived in the 1950s, was expected to generate 500 megawatts of hydropower, later scalable to 1,000MW, while providing over 5.6 billion cubic metres of water for irrigation across 400,000 acres in Kitui, Tharaka-Nithi and Embu counties.

GBM Limited, in partnership with Power China and Portuguese firm RCP Irrigation, was to own and operate the facility for 30 years before handing it over to the Kenyan government. The project promised cheap electricity at $0.08 per kilowatt hour and water at $0.04 per cubic metre.

Mbadi dismissed allegations that the PPP Committee acted under foreign influence, describing the committee as “an independent statutory body with fiduciary responsibility in the conduct of its business.” He noted that the GBM consortium’s proposal underwent evaluation and was accorded opportunities for clarifications before the final decision.

The Cabinet Secretary revealed that the project structure had changed from what was initially granted preliminary approval by the PPP Committee, particularly following the exit of ERG International as a partner. He also clarified that while GBM had participated in an earlier tender process under the Public Procurement and Asset Disposal Act in 2017, the current termination relates to a fresh application submitted under the PPP framework in January 2023.

“The news pieces give the misleading impression that the present termination was pursuant to a competitive process that GBM won. The tender process under the PPAD Act was duly terminated by the courts, following which GBM instituted another separate independent application under the PPP regime,” Mbadi explained.

The Treasury has indicated that the National Irrigation Authority, as the contracting authority, may subject the project to an open competitive tender under Section 46 of the PPP Act 2021, potentially reviving the ambitious infrastructure development.

Despite the setback, Mbadi reaffirmed the government’s commitment to delivering viable infrastructure projects while maintaining transparency and accountability standards in all procurement processes.

The cancellation deals a significant blow to Kenya’s efforts to boost hydropower generation, particularly as locally-generated hydro remains the cheapest electricity source at an average of Sh3.83 per kilowatt-hour compared to geothermal at Sh10.28 per kWh.​​​​​​​​​​​​​​​​