Spanish Firm Unable To Raise Sh185 Million Security Cost In Sh10 Billion Debt Case With Ketraco

A high-stakes battle between Kenya Electricity Transmission Company and a Spanish contractor has taken a dramatic turn after it emerged the foreign firm could not raise the Sh185 million security for costs that Ketraco demanded in the Sh10 billion debt saga.

The revelation came as the High Court dismissed Ketraco’s application, ruling that the request was nothing more than an attempt to stall an already long-delayed liquidation process.

The case traces back to 2016 when Ketraco terminated two EPC contracts awarded to Spanish engineering giant Instalaciones Inabensa for the construction of a power line and a substation.

The contractor moved to arbitration, and in 2019, the tribunal found Ketraco in breach and awarded Inabensa €37 million plus interest and costs, an amount that has since ballooned to more than €69 million and Sh195 million.  

Ketraco exhausted every possible legal route to overturn the award.

It lost at the High Court, failed at the Court of Appeal, and hit a dead end at the Supreme Court.

With nowhere left to run, the State corporation now faces the threat of liquidation filed by C.A. Infraestructuras T & I SLU, the company that took over the decree through a 2023 deed of subrogation.  

Cornered, Ketraco asked the court to compel the Spanish firm to deposit Sh185 million as security, arguing that the company has no known assets in Kenya and therefore posed a risk if the liquidation petition collapses.

But the court flatly rejected the plea, pointing out that a creditor holding such a colossal decree cannot be described as a litigant who is unable to meet a potential costs order.

It ruled that demanding more money from a party already owed billions would be a clear injustice.  

The judge noted that the Spanish contractor had demonstrated it is a financially sound international player and that Ketraco presented no evidence to the contrary.

The court added that should Ketraco eventually win and be awarded costs, the amount can be offset against the massive decretal sum the creditor is already entitled to.  

This latest blow piles more pressure on the power transmission agency, which is already grappling with billions in unresolved claims including payouts tied to land disputes and terminated contracts.

The Sh10 billion award now hangs over Ketraco like a guillotine, raising questions about the State’s exposure to costly disputes in major infrastructure projects.

If the liquidation petition proceeds successfully, Ketraco could become one of the most high-profile State entities to face such a consequence arising purely from a commercial dispute that dragged on for nearly a decade.