Treasury pays wind farm investors Ksh.1.2B behind Parliament’s back

The National Treasury has set itself for a showdown with the National Assembly over the payment of an estimated Ksh.1.2 billion to the investors of the Lake Turkana Wind Power (LTWP) farm.

The payments in question relate to the investor’s compensation for the delay in the completion of the Loiyangalani-Suswa transmission line by over one year to September 2018 as per the terms of their contractual engagement with government.

Treasury is likely to face a double edged flogging for the payments that appeared first as the only recorded development expenditure issues as per the planning ministry’s documents for the period July 1-31.

On one hand, the Parliament Budget Office (PBO) flagged the late introduction of the spending in the first supplementary budget estimates for the 2019/20 financial year without the corresponding list of expenditures, a feature which sits contrary to article 223 of the Constitution on spending money that has not been appropriated.

At the same-time, the National Assembly’s Budget and Appropriations Committee (BAC) had recommended for the deferring of the Ksh.1.2 billion payment to LTWP investors pending the completion of a special audit by the Office of the Auditor General in its report to the house on the first supplementary estimates on November 26.

The LTWP leadership confirmed receipt of all pending bills owned by government for the delay of the line to render BAC’s attempt of freezing the transfers null and void.

“We do not have any outstanding payments due from government for the delay of the transmission line,” LTWP Director Rizwan Fazal told Citizen Digital in a phone interview on November 29.

According to the wind farm’s leadership, the National Treasury rounded off the repayment of Ksh.1.2 billion (€9.98 million) at the end of July after taking a Ksh.622 million (€5.5 million) discount on the total outstanding sum of Ksh.1.7 billion (€15.4 million)

The LTWP leadership had slapped the government with a weighted Ksh.14.6 billion line for the delay of the transmission line as per the ‘take or pay’ contract.

This is after the transmission line was only delivered in September 2018 against the plant’s achievement of first commercial operations at the end of January 2017.

The take or pay obligation which requires the State to evacuate power from the plant or pay for the generated electricity has been thrown into controversy with the fine having been passed as a charge to monthly consumer bills.

Attempts to reach the National Treasury for comment on the unauthorized payments failed to bear fruits by the time of publishing.