Sh300 Billion Insurance Cover Scandal Rocks Ketraco As Senior Officials Demand Huge Bribes

Kenya’s power transmission backbone is hanging by a thread as the Kenya Electricity Transmission Company faces its gravest crisis yet, with over Sh300 billion worth of critical national infrastructure left completely uninsured for more than five months while senior officials allegedly orchestrate an elaborate kickback scheme that has brought the insurance tender process to a grinding halt.

The scandal, which has sent shockwaves through the energy sector and raised alarm bells at the highest levels of government, centers on explosive allegations that senior Ketraco operatives demanded such exorbitant bribes from Fidelity Shield Insurance, the company that legitimately won the tender to insure Ketraco’s vast asset portfolio, that the insurer reportedly wired back the contracted funds rather than participate in what insiders describe as an institutionalized extortion racket.

At stake is nothing less than the security of Kenya’s entire electricity transmission network. Ketraco’s massive asset base includes the Sh40 billion Suswa substation, the Sh25 billion Isinya hub, the Sh10 billion Mariakani station, alongside dozens of other substations and hundreds of kilometers of high-voltage transmission lines strung across the country on steel pylons.

The company also maintains a 24-hour standby aircraft and other capital-intensive assets that are now operating without any insurance protection whatsoever.

According to documents obtained by investigators and shared with consumer watchdog Cofek, the insurance cover lapsed at the end of June 2025, leaving taxpayers exposed to catastrophic financial risk should any accident, fire, or structural failure occur at any of these critical installations.

For a state corporation that sits at the very heart of Kenya’s energy infrastructure, this is not merely administrative negligence but what experts are calling willful sabotage of public interest.

The saga began when Fidelity Shield Insurance emerged as the successful bidder for the insurance tender and duly signed the contract to provide comprehensive cover for Ketraco’s assets.

The performance bond remains intact and the contract between Ketraco and Fidelity is still legally active, making the subsequent events all the more puzzling and troubling.

Multiple sources within the energy sector say that after signing, Fidelity was confronted with kickback demands from senior Ketraco operatives that were so shocking in their scale that the insurance company made the extraordinary decision to return the funds rather than comply with what they viewed as criminal demands.

But the scandal doesn’t end there.

Rather than address the impasse or investigate the allegations, Ketraco insiders allegedly turned to Madison General Insurance, reportedly persuading Fidelity to seek Ketraco’s concurrence to cede part of the insurance risk to Madison.

This maneuver effectively created a retrofit joint venture arrangement despite the fact that the original contract had been awarded exclusively to Fidelity through a competitive tender process.

Industry experts warn that this looks less like legitimate risk-sharing and more like risk-shifting designed to accommodate and distribute kickback demands among a wider network of beneficiaries.

The plot thickens with revelations about the individuals allegedly at the center of this scheme.

Deep concerns are mounting about what insiders describe as an ethnic cartel dominating both the Ketraco board and top executive management.

This concentration of individuals from the same community is believed to be enabling the coercion, collusion, and systematic manipulation of procurement processes, including the stalled insurance arrangement that has left the nation’s power infrastructure dangerously exposed.

Perhaps most puzzling is why the multi-billion shilling insurance portfolio was shifted from its natural home in the procurement or finance directorate to the Human Resources directorate.

Board director Mercylynate Rotich, who oversees Human Resources, allegedly orchestrated this unusual transfer, placing the enormous insurance responsibility under the supervision of a youthful General Manager, Linda Korir, who is now accused by multiple sources of spearheading the demand for hefty kickbacks from insurance providers.

Mercylynate Chepkirui Rotich, KETRACO Director

The implications are staggering.

With uninsured power stations, transmission lines, and aircraft, Ketraco is literally one accident away from a national economic catastrophe.

A fire at any major substation, structural failure of transmission towers, or incident involving the standby aircraft could plunge the country into billions of shillings in unrecoverable losses, all of which would ultimately be borne by taxpayers.

The ongoing insurance debacle represents not just mismanagement but what can only be described as a direct assault on public interest and national security.

The scandal has caught the attention of the highest offices in government. Head of Public Service Felix Koskei has formally asked Energy Cabinet Secretary Opiyo Wandayi to shed light on the alarming development and provide explanations for how a state corporation responsible for such critical infrastructure could be allowed to operate uninsured for over five months.

Neither Wandayi nor Ketraco acting CEO Kipkemoi Kibias responded to inquiries seeking their comment on the explosive allegations.

This insurance scandal is just the latest in a series of procurement controversies that have plagued Ketraco in recent months.

In September, the company’s then-CEO Engineer John Mativo was dramatically sacked following a separate Sh400 million transformer procurement scandal in which a massive 70-tonne transformer worth hundreds of millions of shillings was transported from Mombasa port without proper contractual arrangements or insurance cover, fell off the transporter’s truck, and was completely destroyed, representing a staggering loss to taxpayers.

That incident, involving a critical component for the strategic Turkwel-Ortum-Kitale transmission project meant to improve power supply across Western Kenya, highlighted the apparent culture of procurement irregularities that has taken root at the state corporation.

The destroyed transformer has delayed critical improvements to the national grid and left several counties in Western Kenya without the enhanced power quality and reliability they desperately need.

The Insurance Regulatory Authority now faces mounting pressure to act decisively.

Questions are being asked about what sanctions will be imposed on both Fidelity Shield Insurance and Madison General Insurance for their roles in this murky affair.

However, many observers argue that the real culprits are the Ketraco officials who allegedly created this crisis through their extortion demands, leaving the nation’s power infrastructure vulnerable while they pursued personal enrichment.

The scandal exposes deeper governance failures within Kenya’s state corporations, where high-value infrastructure projects carry both strategic national importance and, it seems, outsized opportunities for corruption.

With Ketraco already dealing with the fallout from cancelled contracts including the controversial Adani Group deal affecting several key transmission projects, the insurance crisis could not have come at a worse time for the company’s credibility.

As the investigation continues and pressure mounts for accountability, the focus remains squarely on board director Mercylynate Rotich and Human Resources General Manager Linda Korir, both of whom have been identified by multiple sources as key figures in the alleged kickback scheme.

The longer this impasse persists, the more Kenyans remain dangerously exposed to potential catastrophe.

For now, Kenya’s Sh300 billion power transmission empire continues to operate in the shadows, unprotected and vulnerable, while a handful of officials allegedly hold the nation’s energy security hostage to their greed.

The question on everyone’s lips is simple: how long will the government allow this reckless endangerment of public assets to continue?​​​​​​​​​​​​​​​​