A tussle between a Turkana county executive and a geothermal electricity generator could stall a 140MW power project.
The acting executive for Energy, Environment and Natural Resources accuses Olsuswa Energy of seeking to exploit geothermal resources without first signing a memorandum of understanding with the county government.
Olsuswa published a notice on November 16 calling on firms to tender for various services in relation to geothermal exploration in Turkana County.
The energy firm said it planned to construct a geothermal power plant to inject 140MW into the national power grid. Three weeks after publishing the advertisement, Turkana County has published a series of notices in local dailies stating that the county government and Olsuswa have neither reached an agreements nor signed an MoU regarding terms of engagement.
The county is now warning private firms against dealing with Olsuswa in relation to the exploration saying no agreements have been reached, especially with regard to the use of community land and its resources.
The MoU, the notice said, will involve the county government, local leaders and community representatives — who are custodians of the land and its resources.
“The public and private or potential investors dealing with Olsuswa Energy Ltd are hereby informed or advised accordingly that no agreements or MoU have been concluded with the said investor,” read the notice, by acting county executive Charles Lokioto Ewoi.
The tussle highlights hurdles which investors seeking to exploit natural resources face while dealing with the two layers of government; national and county.
Olsuswa is one of the many energy-related projects in Kenya that have been delayed over land issues. Construction of a 61MW wind farm in Kinangop, Nyandarua, and a 400MW wind power plant in Meru have stalled due to land acquisition difficulties.
“And as such, the Turkana County Government and the people of Turkana will not bear any responsibility for any decisions or actions taken by Olsuswa Energy Ltd with regard to access and exploration at the Barrier Volcanic site,” the notice read.
Olsuswa Energy, owned by Mayfox Mining’s chairman Manga Mugwe, however said it followed due process and is waiting on the county government to furnish it with an MoU.
In a letter seen by the Business Daily and dated June 8, 2015, the county government said that the Olsuswa project was in line with the County Integrated Development Plan (CIDP) of engaging investors in renewable energy.
The county stated that it would avail an MoU to provide Olsuswa with clear guidelines on working relationships gave the company a go-ahead to seek financiers for the project.
“We confirm this engagement and recommend funding for Olsuswa on this project,” concluded the letter by Rhoda Arupe Loyor, the then County Executive Ministry of Energy Environment and Natural Resources.
Mr Mugwe partly blamed the misunderstanding on the new county executive. “We have written several letters following up on the MoU but we did not get any response from them.
‘‘We waited for four months and decided to start preparing ourselves with prior planning because tender processes last up to six months,” said Mugwe.
“Olsuswa Energy would never contradict the county because our documentation is very clear. We only advertised so that we can see what is available in the market— the prices and suppliers — in preparation and to know how much funds we will need to start with,” he said.