Ethiopian firm seeks payment for Kenya power line

Ethiopian firm Kabew Limited is seeking to attach an account held by Spanish contractor Instalaciones Inabensa SA at the Africa Development Bank (AfDB) in a dispute over payment for construction works on power lines connecting Kenya and Uganda’s national grids.

Kabew, an Ethiopian firm with a Kenyan subsidiary, has asked the High Court to issue the attachment order to settle a Sh150 million debt it claims arose from sub-contracting works it did on the Kenya-Uganda interconnection power project.

The Ethiopian firm claims Inabensa has refused to settle the claim for over a year, and that the Spanish firm has now hired other sub-contractors to take over the project.

Inabensa was hired by the Kenya Electricity Transmission Company (Ketraco) to carry out the project at a total cost of Sh2.3 billion.

Inabensa is, in a separate suit filed last week, fighting to stop Ketraco from kicking it out of the project. Justice Olga Sewe last week stopped Ketraco from cancelling Inabensa’s contract until the suit has been determined.

“The parties entered into an agreement for the construction of part of an interconnection of electric grids between Kenya and Uganda. Inabensa has not paid Kabew any monies for the project for over a year.

“Inabensa has now brought in other sub-contractors to do the works yet money is still owing to Kabew. The defendant is owed some money by Ketraco held at the AfDB which Kabew verily believes is sufficient to cover the judgment award herein,” Kabew says.

Inabensa however wants the matter referred to arbitration, as the firm insists that the contract with Kabew provided for arbitration in the event of a dispute.

The Spanish firm wants the High Court case suspended until the parties have ironed out their differences before an arbitrator.

“In the circumstances, the High Court does not at this stage have jurisdiction to entertain the dispute between the parties. The filing of the suit herein is improper and a blatant abuse of the court process,” says Raul Arribas Andres, Inabensa’s project manager.

Kabew says Inabensa has also failed to provide it with a tax exemption certificate, a move that has seen it accumulate heavy debt claimed by the Kenya Revenue Authority.

The interlinking of power grids is part of a plan to have countries in the Nile Equatorial Lakes region to easily engage in power trade while stabilising the connected electricity networks. The entire project is expected to cost about Sh5 billion.

Kenya is also in the process of linking its power grid with Tanzania’s and Ethiopia’s.

Inabensa in the suit against Ketraco says that the State Corporation has refused to make payments and grant it unlimited access to the project sites as agreed in the contract, and that the State corporation has now unlawfully backed out of the deal.