The strange case of the Kenyan missing solar farm

In a small timber house hidden in the midst of coffee bushes in the village of Kagati, right on the edge of the forest at the foot of Mount Kenya in Nyeri County about 150 kilometres North of Nairobi, Isaac Nguru Nderitu sits with his legs crossed. An open door and window let in streams of sunlight that is the only illumination in the partially dark room.  Like most of his neighbours, Nguru’s house is not connected to electricity because it’s too far away from the power transformer. The 52 year old father of four and a coffee farmer, has lived in the village of Kagati all his life.  They had learnt to live a simple life without electricity. Then in June 2016, Nderitu Gachagua, the former governor of Nyeri called a meeting in the village. There, he would announce a solar farm that would become one of the largest clean energy developments in the whole of East Africa, and an end to the county’s energy poverty. The panels would be erected in a 134-acre piece of idle land belonging to the county government. For a county whose annual budget is Sh7.4 billion ($74 million), announcing a project of Sh6 billion ($60million) was ambitious by any standard.  Two sides of churches and schools After the announcement, some residents were enthusiastic about it. Others, not so much. Those who backed the plan looked at it beyond the electricity generation to the infrastructure and employment opportunities that a project of such magnitude would present. “We were excited. I was one of those who went to the meeting. The leaders said that it was good. We would have gotten jobs and our schools and churches would have gotten electricity and I wouldn’t have to use paraffin lamps anymore,” Nguru said. Others, especially local leaders, were against awarding the land rights to a private company. The land would be leased to investors for twenty years before the project reverted back to the community.  James Kabarita, a coffee farmer from the village with unfulfilled political aspirations, is one of those who were against it. “The land is a public utility and the county government did not sit down with the residents and ask them their views. Yet that is the land where we graze our livestock or if we need to build a church or a school, so people were not excited,” he says. Despite the opposition, the county went ahead with the project. But years later the plan floundered, leaving nobody happy.  What could have failed? On paper, it was the perfect solution for the county’s power needs. Light promises “When this project is complete we are going to add 40 Megawatts to the national grid,” the governor said then. Its output would have been significant enough to power the entire town. For instance, according to the Rural Electrification and Renewable Energy Corporation, a 50 MW solar plant in Garissa, in North Eastern Kenya contributes about 2% of the national energy mix. Some of the surpluses would even be fed into the national grid and used to power coffee and tea factories in the agricultural area. The project would also have been a welcome reprieve to coffee farmers such as Nguru or tea farmers affiliated to the Kenya Tea Development Authority (KTDA) which has been working to cut down the rising energy costs. Nguru, who delivers his berries to Kiamariga Coffee Factory, says coffee cooperative societies deduct as much as 20 per cent of farmers’ earnings to cater for costs such as electricity. The nearest tea factory, Ragati Tea Factory, is 12 kilometres away and would have been within range of the project. KTDA has been looking to manage the electricity supply outages from the existing supply from the national power utility, especially when users are prone to disconnections between January and May when the level of water in the hydro dams reduces drastically. A project for county and country Kenya relies heavily on electricity produced from hydro and fossil fuels, but climate change has affected energy generation. The Kenya Least Cost Power Development Plan (LCPDP), a document released in 2018 highlighting Kenya’s 20 year energy plan, indicates that Kenya’s generation mix consisted of 36% of hydro, 34% fossil fuels, 28% geothermal, 1% cogeneration and 1% from wind and solar.  On 30 June 2017, Kenya had an installed electricity generation capacity of 2,333MW comprising of hydro (824MW), thermal (803MW), geothermal (652MW), wind (26MW), biomass/cogeneration (28MW), and solar (0.55MW). In 2016/17 solar made up a negligible 0.02% of the energy purchased by the power utility company. However, since then, the Kenyan government is moving away from fossil fuel energy and investing heavily in renewable energy projects such as solar and wind. It was only in late 2019 that the country launched the Chinese-built 50 MW Garissa Solar Plant which cost Sh13.5 billion. The Ministry of Energy is also encouraging independent power producers in wind and solar to improve the country’s power mix. The Independent Power Producers (IPPs) accounted for 29 per cent of

The strange case of the Kenyan missing solar farm

In a small timber house hidden in the midst of coffee bushes in the village of Kagati, right on the edge of the forest at the foot of Mount Kenya in Nyeri County about 150 kilometres North of Nairobi, Isaac Nguru Nderitu sits with his legs crossed.

An open door and window let in streams of sunlight that is the only illumination in the partially dark room. 

Like most of his neighbours, Nguru’s house is not connected to electricity because it’s too far away from the power transformer.

The 52 year old father of four and a coffee farmer, has lived in the village of Kagati all his life. 

They had learnt to live a simple life without electricity. Then in June 2016, Nderitu Gachagua, the former governor of Nyeri called a meeting in the village. There, he would announce a solar farm that would become one of the largest clean energy developments in the whole of East Africa, and an end to the county’s energy poverty. The panels would be erected in a 134-acre piece of idle land belonging to the county government.

For a county whose annual budget is Sh7.4 billion ($74 million), announcing a project of Sh6 billion ($60million) was ambitious by any standard. 

Two sides of churches and schools

After the announcement, some residents were enthusiastic about it. Others, not so much.

Those who backed the plan looked at it beyond the electricity generation to the infrastructure and employment opportunities that a project of such magnitude would present.

“We were excited. I was one of those who went to the meeting. The leaders said that it was good. We would have gotten jobs and our schools and churches would have gotten electricity and I wouldn’t have to use paraffin lamps anymore,” Nguru said.

Others, especially local leaders, were against awarding the land rights to a private company. The land would be leased to investors for twenty years before the project reverted back to the community. 

James Kabarita, a coffee farmer from the village with unfulfilled political aspirations, is one of those who were against it.

“The land is a public utility and the county government did not sit down with the residents and ask them their views. Yet that is the land where we graze our livestock or if we need to build a church or a school, so people were not excited,” he says.

Despite the opposition, the county went ahead with the project. But years later the plan floundered, leaving nobody happy. 

What could have failed? On paper, it was the perfect solution for the county’s power needs.

Light promises

“When this project is complete we are going to add 40 Megawatts to the national grid,” the governor said then. Its output would have been significant enough to power the entire town. For instance, according to the Rural Electrification and Renewable Energy Corporation, a 50 MW solar plant in Garissa, in North Eastern Kenya contributes about 2% of the national energy mix. Some of the surpluses would even be fed into the national grid and used to power coffee and tea factories in the agricultural area.

The project would also have been a welcome reprieve to coffee farmers such as Nguru or tea farmers affiliated to the Kenya Tea Development Authority (KTDA) which has been working to cut down the rising energy costs.

Nguru, who delivers his berries to Kiamariga Coffee Factory, says coffee cooperative societies deduct as much as 20 per cent of farmers’ earnings to cater for costs such as electricity.

The nearest tea factory, Ragati Tea Factory, is 12 kilometres away and would have been within range of the project.

KTDA has been looking to manage the electricity supply outages from the existing supply from the national power utility, especially when users are prone to disconnections between January and May when the level of water in the hydro dams reduces drastically.

A project for county and country

Kenya relies heavily on electricity produced from hydro and fossil fuels, but climate change has affected energy generation.

The Kenya Least Cost Power Development Plan (LCPDP), a document released in 2018 highlighting Kenya’s 20 year energy plan, indicates that Kenya’s generation mix consisted of 36% of hydro, 34% fossil fuels, 28% geothermal, 1% cogeneration and 1% from wind and solar. 

On 30 June 2017, Kenya had an installed electricity generation capacity of 2,333MW comprising of hydro (824MW), thermal (803MW), geothermal (652MW), wind (26MW), biomass/cogeneration (28MW), and solar (0.55MW).

In 2016/17 solar made up a negligible 0.02% of the energy purchased by the power utility company. However, since then, the Kenyan government is moving away from fossil fuel energy and investing heavily in renewable energy projects such as solar and wind.

It was only in late 2019 that the country launched the Chinese-built 50 MW Garissa Solar Plant which cost Sh13.5 billion. The Ministry of Energy is also encouraging independent power producers in wind and solar to improve the country’s power mix.

The Independent Power Producers (IPPs) accounted for 29 per cent of the generation capacity in  2017. 

Of the 2,700 MW capacity additions planned over the next five years, 80 per cent is likely to come from private investment.

But the collapse of the Kiamariga Solar Project under unclear circumstances raises critical questions of Kenya’s renewable energy aspirations.

Everything goes silent

The project had been planned to the last detail, to the extent that a developer had been identified. 

Kumar and Associates, a company based in Nairobi, won the bid to develop the power farm in 2014. Two years later they secured the land rights for the project.

The company then engaged Green Giraffe, a Dutch advisory firm focused on the renewable energy sector, to run a feasibility study.

There are crucial steps a developer has to take before they undertake an energy project in Kenya.

In this case, Kumar & Associates had to convince Kenya Power, the company in charge of power distribution and retailing, that the project was viable and secure a grid connection agreement.

It would then have to acquire a generation license from the Energy and Petroleum Regulatory Authority (EPRA), the independent regulator that licences energy projects, and eventually a Power Purchase Agreement (PPA) with Kenya Power.

To meet the requirements,  Kumar & Associates brought onboard Green Giraffe which after meeting with Kenya Power officials and conducting a study mapped out how power from the solar farm could be added onto the national grid.

But, according to Green Giraffe, everything stopped after Kenya Power denied the project a PPA.

The company

Soon after the company won the bid to set up the plant, Mr Kumar registered Kiamariga Solar Energy Limited, the special purpose vehicle for the solar project. According to a search at the Register of Companies, Kiamariga Solar Energy Limited was registered on March 16, 2016 and is wholly owned by Mr Kumar. The company’s address is given as P O Box 38349 Parklands, the same that was listed in the documents presented for the bid.

Part of the conditions for a successful bid in putting up the solar farm was the company should have experience in setting up more than 100 megawatts of power.

Furthermore, the conditions required that the company’s employees should have a wide solar development and financing experience of more than 10 years and wide project management and implementation experience in at least three countries. 

The involvement of the company was part of the reason why the Nyeri County Assembly was opposed to the project.

Mr Kumar is a Member of the Institute of Certified Investment and Financial Analysts (ICIFA).

Some of the companies that Kumar beat to the tender are Norfund Scatec Solar, Soventix from Wesel in Germany, Naanovo Energy from the UK, Nextgen Solar, and Envirotech consultancy Africa Limited.

Questions raised 

The ward representatives questioned how an accounting firm won a bid to develop a multi-billion-shilling solar energy farm.

The most vocal criticism of the project came from then Mathari Kiganjo, Member of County Assembly Baragu Mutahi, who was the County Assembly Majority Leader.

Mr Mutahi has not tempered his opinion. He still believes that if the project had gone on the public, the county would not have seen it’s value.

“The county had partnered with someone else, and the area they wanted to use was public land. The people were not enthusiastic about it,” Mutahi said recently.

The assembly’s biggest misgiving revolved around the usage of the land, which belonged to the defunct county council which was replaced by sub-counties in 2010.

“Our understanding as the assembly was that the project would be a conduit to siphon public funds. The deal was not transparent, it was brought to the county assembly and we did not have any documents to support it,” he said.

In Kenya, disputes over land are not uncommon for energy investment of a large scale.

Isaac Nguru outside one of the houses in his home in Kagati Village in Nyeri County, Kenya, in this picture taken on October 13, 2020. On the roof is a solar panel that he uses for his domestic power needs. He lives next to Kagati Community Grounds, a proposed site for a solar energy project. Photo by Kibata Kihu/Standard

Not an isolated case

Four months ago, Cordisons International, a US wind power investor, lost a case against the National Land Commission for the issue a leasehold to 11,000 acres of land in Kiongwe, Lamu County, to build a wind farm.

Cordisons claims it was authorized to proceed with an 11,000-acre wind project, but that the NLC later reallocated 3,200 acres of the plot to a local firm Kenwind, another wind power investment company.

In early 2016, the 61 MW Kinangop wind project was cancelled, primarily due to delays caused by local opposition to land usage. The local community insisted they had not to have been fairly compensated for their land

The Lake Turkana Wind Power in Marsabit County in Northern Kenya also faced similar questions over the manner in which the land the project is developed on was acquired.

Kenwind project in Lamu has faced similar problems, resulting in a compensation dispute with 600 farmers, who are demanding nearly USD15,000 per acre for an unspecified area of the 3,200-acre plot.

A group of Nyeri residents opposed to the use of the land for the solar project wrote to the National Land Commission protesting its use for the project.

“The recent encroachment on our land by strange surveyors is locally treated as a corrupt move by the county government to grab it,” they said.

The county insisted then that the process was above board, and it would move forward with it since it had signed a power purchase agreement with utility company Kenya Power.

Samuel Wamathai, who was Deputy Governor and took over when Nderitu Gachagua died in office, declined to comment for this article.

EPRA had given the project a commercial operation date for the project for June 2025.

The Authority reviews and approves Power Purchase Agreements (PPA) and electricity generation licenses when such applications are submitted for approval by project proponents.

Ag. Director-General Mueni Mutung’a said, however, the county government had never gone to the organisation with any proposal to have the project licenced. 

“The project proponent has to negotiate a PPA with Kenya Power & Lighting Co and submit the same to the Authority for approval. After the PPA has been approved, the parties can then apply for a generation license,” he said. The generation licence was never granted.

Still in the cards

But in Nyeri County, the government still sees the merits of the project and is mulling over the idea of reviving it. 

Muthui Kariuki, who is in charge of the energy docket in the county government, explained that the county had reviewed the merits and found that there were problems with it. 

His explanation raises the same issues as the county assembly. The county had gotten a promissory note from investors but the process was opaque and abuse was suspected.

“When we came in we appraised ourselves with the situation and we found that the project left a lot to be desired. There were legal technicalities,” Muthui. 

He, nevertheless, still sees solar energy adoption as the direction the county is going. “We still find it viable and of course we want to go green. The idea was extremely good, it was going to benefit the people of Nyeri. We can in fact be able to sell a lot of power to the national grid.”

The continuity of county governments is also a challenge to such a project and puts them at risk of becoming white elephants.