KenGen to pay Sh2 billion as debt battle continues
Geothermal well discharging steam at Menengai Geothermal Development Company (GDC) project in Nakuru County on June 7, 2023. PHOTO | FRANCIS MUREITHI | NMG
The High Court has directed electricity producer KenGen to pay Sh1.98 billion to a firm seeking billions of shillings from Geothermal Development Corporation (GDC) in a botched contract.
Justice Alfred Mabeya further set aside an order freezing all KenGen’s bank accounts as the row between GDC, Lantech Africa Ltd and several banks escalated.
The judge unfroze KenGen’s bank accounts in Absa, KCB and NCBA and directed the claimant (Lantech) to pay the lenders Sh50,000 each as costs of the suit.
KenGen had been roped into the row on the basis that it should settle its debt to GDC which would then be in a position to settle its obligations to Lantech.
The power generator moved back to court seeking a review of the decision issued on September 20, directing a freeze of its bank accounts and any monies channelled towards the settlement of a Sh3.9 billion debt GDC owes to Lantech Africa.
Lantech had been contracted by GDC for a Menengai Geothermal Project and the parties fell out. The dispute was referred to an arbitrator who ruled in favour of Lantech but the award has never been paid.
“The freezing order on Standard Chartered Bank account said to hold Sh3.8 billion is hereby set aside and the bank directed to forthwith pay the award holder 50 percent of the decretal sum in the sum of $13,400,000,” the judge directed.
Justice Mabeya said thereafter, KenGen will be at liberty to operate the said account with a view to pay for power and other utilities at the end of the month.
Further hearing of the case is scheduled for October 3.
GDC had also applied for the order to be set aside saying the judge made the directive before hearing them. Further, the corporation said the order converts KenGen into the principal debtor without any suretyship.
