The Energy ministry Monday said that the two firms did not make it to the list of short-listed to develop the plants with a combined output of 1,800 megawatts (MW).
This is a blow to Centum and TransCentury given the firms have been looking to diversify their operations with lucrative power sector being their target. The investment companies were dropped at technical evaluation level.
Centum had teamed up with Chinese firm Sepco and Thermax of India to build a 900-1,000MW coal power plant in Lamu while TransCentury had bid for the 700-800MW coal station via its engineering subsidiary, Civicon.
The State has short-listed 22 firms, mainly from Japan, China and India, out of the 62 firms that had sent bids for the two power plants, setting the stage for financial valuation.
“This was a competitive bid and we’re looking for firms that can deliver the power at least cost,” said Davis Chirchir, the Energy Cabinet secretary in a press conference Monday.
“We will choose the winner based on the cost of power they provide. We’ll go for the cheapest.”
Global giants gunning for the mega deals include Sinohydro, Tata Power, Toyota Tsusho, Samsung, Aldwych International and Wärtsilä who will be required to develop the electricity plants under a build, own, operate (BOO) model.
The bidders are banking on the increased demand for power in Kenya, which analysts South Africa’s Standard Bank reckon has the one of the most lucrative power tariffs for foreign investors given consumers electricity bills are dollar-dominated.
The power distributors are cushioned from sharp currency fluctuations by a monthly variable forex adjustment costs on consumers electricity bills.
With capacity of 1,664 MW against a maximum recorded demand of about 1,410MW, Kenya is under pressure to boost power generation as its economy is expected to expand at more than five per cent.
The government invited the bids in October. The natural gas-fired plant will be based near Mombasa.
Centum has a portfolio of more than Sh20 billion spread across real estate beverage, automotive, food, and insurance sectors, but lacks a presence in the power sector.
It recently incorporated Mvuke Power Ltd, a subsidiary registered in Mauritius, which will hold its investments in power generation and distribution.
TransCentury, the firm that popularised investment clubs among Kenyans, has made a strategic shift, transforming itself into an infrastructure company.
This shift is what informed TransCentury’s purchase of a 63 per cent stake in Civicon Limited, a regional engineering and logistics firm in 2012 to get a piece of these lucrative sectors.
Civicon has built roads, petroleum refineries, laid oil pipelines and built power plants.