Business
No Alarm Over Idle Projects, KenGen Reacts To Auditor General’s Queries
Electricity generating company KenGen has defended its stock of idle assets which were highlighted in an audit of its books for the year ended June by the Office of the Auditor General (OAG).
In response to the disclosures, KenGen says idle geothermal wells valued at Ksh.79.3 billion are to be incorporated into future power generation projects.
“Energy projects, especially geothermal infrastructure, require significant lead time during which geothermal steam resources must be harnessed and availed to guide plant specifications and conclusion of financing agreements and terms,” the company said on Thursday.
Examples include 83MW Olkaria I unit 6 to be commissioned by end of the year, 140MW Olkaria VI project, 50MW Olkaria I Rehabilitation among others. “These are a long-term investment that will go a long way in making Kenya green and also reduce the overall cost of power in the long run. On the case of the hydro plaza, the project has since been completed and officially handed over to the company and is now fully occupied.” KenGen says.
On transmission lines, KenGen says that notably Sondu and Olkaria the respective loans are currently being paid by the transmission company and negotiations for transfer of both the underlying loans and lines are at advanced stages.
KenGen says it has dug an estimated 319 geothermal wells which have been subsequently assigned to current and future projects.
In her audit of Kengen books, Auditor General Nancy Gathungu noted the vacant geothermal wells offer no value for money even as KenGen services a loan taken from the Export-Import Bank of China (EXIM) for the investment.
The idle geothermal wells were flagged alongside other projects whose value rounds off to Ksh.99.3 billion and which the audit fingers as likely incomplete projects.
The projects include Ksh.4.5 billion deployed in the construction of Soundu and Olkaria transmission lines which are currently used by a third party for revenue generation.
According to the audit report, KenGen did not provide explanations to auditors on why the projects had not been completed and capitalized.
KenGen financial statements through 12 months to June 30, 2021, earned a qualified opinion after the company failed to revalue its power, plant and equipment for depreciation, a matter the electricity generating company blamed on COVID-19 related disruptions.
The lack of inclusion for the depreciated assets which are factored in the calculation of net earnings means KenGen real earnings in the period are much lower than the reported net profit of Ksh.1.3 billion for the period.
Kenya Insights allows guest blogging, if you want to be published on Kenya’s most authoritative and accurate blog, have an expose, news TIPS, story angles, human interest stories, drop us an email on [email protected] or via Telegram
The Man Who Starved Kenya’s Voice
The Rot Inside Absa: How Bank Insiders Are Looting Nairobi’s Customers
The President’s Helicopter: How Ruto’s Aviation Empire Lands a Historic Airbus Milestone While His Government Writes the Tax Code
“TikTok Who? YouTube Sorry. A Kenyan-Built Platform Just Dropped—and 20 African Ministers Showed Up To Launch It.”
Denial Under Duress: The Untold Collapse Threatening David Lagat’s DL Group’s Empire
Stung By West Africa Rejections, France Courts Rest Of Continent at Kenya Summit
THE INSURER THAT TOOK YOUR PREMIUM AND FORGOT YOUR NAME: How ICEA Lion Left a Client Begging for Sh7.8 Million Across Four Months
Safaricom’s Sh1.4 Billion Reckoning: How Kenya’s Most Profitable Company Stole a Man’s Idea and Got Caught
Bush Air Safaris Founder John Ndiritu Risks Losing Property Over Disputed Loan Claim
Bia Tosha’s Claim For Injunction Is Designed To Sabotage The Sh300bn Sale of EABL Shares
How Did a Sh468K KRA Salary Allegedly Turn Into Sh30 Billion? Questions Deepen Over Commissioner George Obel and Ciala Resort Owner’s Wealth
Nairobi Freezes Binance Accounts in Sweeping Anti-Fraud Crackdown as Global Scandal Record Haunts World’s Largest Crypto Exchange
THE UNTOUCHABLE CLERK: How Fatuma Mwalupa Allegedly Turned Kwale Assembly Into a Personal Treasury and Outsmarted Scrutiny
The Man Behind the Badge: How Prof. Erastus Kanga Turned Kenya’s Premier Wildlife Agency into a Theatre of Corruption, Fear and Impunity
THE BRAZEN RETURN: Triton Thief Yagnesh Devani, Who Pillaged Kenya of Sh7.6 Billion and Fled, Now Asks the Same Courts He Escaped to Restore His Stolen Wealth
TotalEnergies Moves to Sue TikToker for Sh10 Million Over Contaminated Fuel Claim as Kenya’s Petroleum Sector Burns
Green Gold, Rotten Roots: How Kenya’s Biggest Avocado Firms Hijacked a Sh5.8 Billion Harvest Ban
Why the April 21 Flopped Protests Expose Kenya’s Rudderless Opposition
KETRACO CEO Advert Marred By Controversies As Fears Grow That Kipkemoi Kibias Is A Predetermined Candidate
THE PHANTOM COVER: Unlicensed Broker Vanishes With Sh42M, Hussein Mohammed Fingered In The Alleged CHAN 2024 Insurance Scandal
-
Business1 week agoSafaricom’s Sh1.4 Billion Reckoning: How Kenya’s Most Profitable Company Stole a Man’s Idea and Got Caught
-
Africa2 weeks agoThe $24 Million Heist at the End of the World
-
Business1 week agoTHE INSURER THAT TOOK YOUR PREMIUM AND FORGOT YOUR NAME: How ICEA Lion Left a Client Begging for Sh7.8 Million Across Four Months
-
Investigations1 week agoDenial Under Duress: The Untold Collapse Threatening David Lagat’s DL Group’s Empire
-
Business4 days agoThe Rot Inside Absa: How Bank Insiders Are Looting Nairobi’s Customers
-
Business1 week agoBush Air Safaris Founder John Ndiritu Risks Losing Property Over Disputed Loan Claim
-
Arts & Culture2 weeks agoKDC Accelerates the Creative Economy, Innovation and Youth-Led Enterprise Growth at Africa Forward Summit
-
Africa1 week agoStung By West Africa Rejections, France Courts Rest Of Continent at Kenya Summit