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Ketraco eyes end to Sh6.7bn row with Spanish contractor
Kenya Electricity Transmission Company (Ketraco) Managing Director and CEO John Mativo appears before the Public Investment Committee on Commercial Affairs and Energy at the Continental House in Nairobi on July 29, 2025.
The Kenya Electricity Transmission Company (Ketraco) expects a Sh6.7 billion row with a Spanish firm over termination of a contract for construction of an electricity transmission line to Uganda to be settled this month.
Managing Director John Mativo (right) said an inter-governmental committee comprising Ketraco, the Ministry of Energy, the National Treasury, the Ministry of Foreign Affairs, and the Attorney General is currently negotiating with the firm, Inabensa, to settle the amount.
“By the end of this month, we will have a negotiated settlement and get the final settlement amount,” he said before the National Assembly’s Public Investment Committee on Commercial Affairs and Energy.
“We will decide the fate of the Inabensa court award and decide how to pay the amounts owed to the contractor,” Mr Mativo added.
The arbitration court ordered Ketraco to pay the Spanish contractor for termination of a Sh6.7 billion (euros 37 million) contract for non-performance.
The project, which aimed to connect Kenya's power grid with Uganda's, was terminated in April 2016, leading to a legal dispute and subsequent arbitration.
He said the government negotiating team is pursuing three approaches and expects that once an agreement is reached, the National Treasury will provide funding.
Auditor General Nancy Gathungu had questioned Ketraco’s contingent liabilities, which consisted of ongoing court cases relating to the acquisition of wayleaves and contractors' claims beyond the original contract period, amounting to Sh12.97 billion.
Ketraco terminated the botched Inabensa contract for construction of the Lessos-Tororo transmission line to evacuate power from the Marsabit wind farm that was initially awarded to the Spanish firm in 2014 for non-performance.
The move halted construction of an electricity line meant to link Kenya with Uganda.
The project was part of a larger regional initiative to interconnect power grids in East Africa.
Following termination, Inabensa initiated legal action, and an arbitration tribunal ruled in its favour, ordering Ketraco to pay damages and interest totalling over Sh4.8 billion.
The amount has since risen due to interest and penalties on delayed payment.
Ketraco initially contested the ruling but ultimately withdrew its appeal to the Supreme Court, opting to settle the matter to avoid further legal costs.
The delay in resolving the dispute has also reportedly frustrated the regional power line plan and potentially caused Uganda to complete its interconnector ahead of Kenya.
Inabensa went into bankruptcy a few months into the contract and was rendered unable to deliver the project on schedule.
