KenGen ordered to respond to losing bidder in Sh2.5bn carbon credits tender

The procurement watchdog faulted KenGen for failing to respond to the letter, saying this denied the bidder an opportunity to be heard.

“We find that the respondents (KenGen) indeed violated the applicant’s (Sintmond Group Ltd) legitimate right to be heard, given the legitimate expectation created by their promise to provide an official response in line with Section 83 of the Act,” the board said.

The board added: “In light of the foregoing, we find it necessary to order that the respondents make good the breach of the applicant’s legitimate expectation to be heard by issuing an official and formal response to the applicant’s letter dated September 19, 2025, within 7 days of this decision.”

The board further directed that, after issuing the response, KenGen should proceed to conclude the tender for the sale of Certified Emissions Reductions (CERs).

This marks the third time the PPARB has handled the dispute, having previously nullified the tender and later dismissed Sintmond Group’s application in October 2025.

In the October ruling, the board allowed KenGen to proceed with the sale of the 6.38 million carbon credits to Munja Trading Limited in a joint venture with Marwil Energy Holding AS, after dismissing Sintmond Group’s application for review.

Read: KenGen gets nod on mega carbon credits tender

Carbon credits, also known as carbon offsets, are permits that allow the holder to emit a specified amount of carbon dioxide or other greenhouse gases, with one credit equivalent to one tonne of carbon dioxide or its equivalent.

Sintmond Group later successfully challenged the board’s decision at the High Court, arguing that its right to a fair hearing had been violated.

The losing bidder said the due diligence process was procedurally unfair after KenGen failed to respond to its request for information, despite promising to do so, before issuing a regret letter.

In a judgment delivered on December 19, the High Court found that Sintmond Group had been shut out of the post-award due diligence phase and denied the right to be heard.

The court said the firm’s request for information was not addressed and that it was not given a genuine opportunity to provide the information sought by the procuring entity.

“On this ground alone, the application can succeed, and the court finds that the applicant has demonstrated that procedural impropriety and a denial of the right to be heard were violated,” the court stated.

The board had initially dismissed Sintmond Group’s application for review, finding that the firm failed to demonstrate the capacity to undertake a contract of such magnitude.

Its bid was disqualified after it failed to provide independent evidence of successful performance in previous contracts of comparable value and complexity, despite being given an opportunity to do so.

Sintmond Group had submitted the highest bid, offering $23,207,359 (about Sh2.99 billion).

KenGen argued that the firm did not demonstrate prior experience or capacity to manage a contract of similar magnitude and that, when considered alongside the earlier terminated tender, its performance history did not inspire confidence.

“Accordingly, we are persuaded that a reasonable and prudent procuring entity, faced with the same set of facts, would have reached a similar conclusion that the applicant failed to demonstrate sufficient ability/capability to perform the tender,” the board said.

KenGen had advertised the tender in May last year, requiring bidders to demonstrate prior successful participation in emissions reduction trading involving CERs or Voluntary Emission Reductions (VERs), which formed part of the evaluation criteria.

Read: KenGen relaunches Sh4bn carbon credit sale after deal collapses

Three bids were received—from Munja Trading Limited in a joint venture with Marwil Energy Holding AS, Kyoto Network Limited, and Sintmond Group Limited.

After evaluation, the tender committee found the Munja–Marwil joint venture responsive.

The evaluation committee determined that the joint venture had submitted the highest evaluated tender price, totalling $19,637,758 (about Sh2.53 billion), and ranked it as the best evaluated bidder.

Sintmond Group challenged the outcome, arguing that KenGen relied on extraneous and undisclosed due diligence criteria to disqualify it from the tender.

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