Fear Factor: AfDB Withdraws Multibillion Funding After Moi Bought Stake From Raval

The African Development Bank (AfDB) has withdrawn funding for a 35-megawatt geothermal power plant in Menengai, Nakuru county being developed by Baringo Senator Gideon Moi’s Sosian Menengai Geothermal Power company.

Sosian was awarded the tender to develop the power plant alongside two other firms in 2014, under a build-own-operate model.

Moi repurchased a majority stake in Sosian Menengai Geothermal Power from Devki Group, a company owned by businessman Narendra Raval.

Raval spent Ksh8.2 billion on the geothermal assets through Devki Group in 2017.

However, AfDB has issued new conditions, requiring that the company now changes ownership, before they reinstate their multibillion funding.

“The bank is currently engaged on the Quantum Power East Africa (QPEA) project only. It has previously been engaged on the Sosian project as well but it requires a change in shareholding before it can engage further. The delays have primarily been due to negotiation of the finance documents between the lenders and sponsor, closure of certain bankability issues with the government agencies and change in the sponsor of the project,” a source quoted by Business Daily said.

Construction of the plant is already behind schedule by close to eight years, with Raval citing capital injection delays as the main factor for his exit.

The other two firms that were picked to develop similar power plants include New York Stock Exchange-listed Ormat Technologies and Quantum Power. Each was to build a 35MW steam power plant on a public-private partnership basis.

“The three independent power producers to construct 105 megawatt (MW) power plants are yet to attain financial closure with their lenders,” the Treasury told Parliament earlier.

Under the agreement, the government’s Geothermal Development Company was to take care of upfront risks and then invite private sector players to construct, own and operate the plants for 25 years.

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