The management of the Gulf Power Limited, one of the Independnt Power Producers (IPPs) selling electricity to Kenya Power yesterday snub Senate Energy committee even as names of three former senior public officers among them former Energy Minister Kiraitu Murungi emerged as possible possible shareholders through foreign proxy fronts.
Others are former long serving Kenya Power Managing Director Engineer Joseph Njoroge who was later promoted to the post of Energy Principal Secretary and former Energy PS Patrick Nyoike.
Gulf Power Limited is among the elevn IPPs which Members of Parliament (MPs) blame for high electricity prices in the country.
Yesterday, although the committee summons were explicit that either the Gulf Power Ltd Chief Executive Officer (CEO) or Managing Director should appear, instead, the firm sent the firm’s General Manager Norman Wanderi which the committee interpreted as a mockery.
According to records, Francis Njogu Koome is the CEO who is also a director of the company according to government records at Sheria House.
According firm’s CR12 seen by The Informer Media Group, Gulf Power Limited Company Number C.169971, the shareholders and directors are; East Africa Legislative Assembly lawmaker Saud Suleiman Shabhal, Francis Koome Njogu, Ernest Nakenya Nadome, Ahmed Said Bajaber and Duncan King’ori Mukira alongside American Philip William Dyk.
Others are; Victoria Cherotich, Gallant Power Limited (Mauritius), Noora Power Limited, The Kenya Power and Lighting Company Limited Staff Retirement Benefits Scheme 2006 and Kenya Power & Lighting Company Limited Staff Retirement Benefits Scheme.
Out of all the directors and shareholders of Gulf Power Limited, Gallant Power Limited, a Mauritius incorporated firm controls a majority stake of 80 out of the 100 Ordinary shares thus owning majority of shares, despite being listed as a local IPP.
Noora Power Limited (Kenyan) follows by 10 shares while The Kenya Power and Lighting Company Limited Staff Retirement Benefits Scheme 2006 and Kenya Power & Lighting Company Limited Staff Retirement Benefits Scheme hold 5 Ordinary Shares each respectively.
However, when asked to reveal the directors of Gallant Power Limited, a foreign company enjoying an overwhelming controlling stake of Gulf Power Limited, Wanderi casually said he cannot be in a position to immediately do so.
The Senate Committee on Energy chaired by Neri Senator Wahome Wamatinga was irked by the response.
“Who are the owners of Gallant Power Limited?” Nairobi Senator Edwin Sifuna posed.
Senator Wamatinga demanded to know why the majority shareholder in the firm is a company registered in another country.
Hard-pressed by the committee to reveal the beneficial owners of Gallant Power Limited, Wanderi said he could not immediately provide the information.
The casual response caused an outrage from committee members, who accused the official of concealing information to protect powerful individuals.
Wanderi also came under fire on why he was fronted to appear before the committee yet the invite was directly addressed to Mr Njogu, a director and the CEO.
“What you have given us half-baked information and I feel like it is deliberate.” Openly infuriated Wamatinga retorted.
“You have indicated that Gulf Power Limited is a local IPP. Why then is it that a majority shareholder is registered in Mauritius? Is it true that Murungi, Nyoike and Njoroge own part of this company?” he posed.
The senator questioned how one of the former PSs came to own shares in the firm yet the power purchase agreement was signed during his tenure as managing director of Kenya Power.
However, Wanderi denied that the three former State officers are shareholders in Gulf Power Limited, but failed to provide a list of the real directors.
“The individuals you have named may not be directors of Gulf Power. As far as I am concerned, that information is not true.” Wanderi said before the committee adjourned its sittings and directed that the firm’s managing director appear in person.
Siaya Senator Oburu Oginga, citing a presidential task force report that reviewed power purchase agreements in 2018, said Gulf Power, which has signed a 20-year contract with Kenya Power, of selling electricity at twice the cost compared to other IPPs.
“The observation we have from a report by the presidential task force which analysed to the PPAs states that in the financial years ended June 2018, 2019 and 2020; this company was the highest, in fact, it was double in the charges they were making in terms of electricity that of other IPPs.” Oburu noted.
He questioned why the contract signed with Kenya Power does not have a termination clause despite it being exploitative.
The senator observed that the agreement states that Gulf Power has an agreement for 20 years with Kenya Power with a possibility of extension for another term yet there is no clause talking of termination if the government wants to exit the contract. Gulf Power entered into a Power Purchase Agreement (PPA) in December 2012 with Kenya Power putting the utility firm under obligation to buy electricity generated from the thermal plant and also pay energy charges, fuel charges and excess start charges for the Net Electrical Output.
According to Kenya Power’s annual report for the financial year ended June 2022, the firm with an installed capacity of 80.32 megawatts sold 81Gwh to Kenya Power during the period under review receiving Sh3.56 billion.
In the previous financial year, the firm sold 21 Gwh of power to Kenya Power, receiving Sh2.5 billion in the process.
Another point of contention for the committee was the fact that Kenya Power and Lighting Company Limited Staff Retirement Benefits Scheme 2006 is listed as director and shareholder in Gulf Power hence presenting a conflict of interest.
In June 2021, while appearing before the National Assembly’s Public Investments Committee (PIC), former Kenya Power Managing Director Bernard Ngugi declined to reveal the owners of beneficiary firms and 17 Power Purchase Agreements (PPAs) that committed the loss making entity to the shady dealings.
“Power Purchase Agreements have contractual provisions which would require more time to obtain consent and authorisation from court processes because of confidentiality clauses such as Non-Disclosure Agreements,” Ngugi said.
According to Kenya Power records seen by The Informer Media Group, some of the listed independent power producers in the country are, Iberafrica Power, Tsavo Power, Thika Power, BioJuole Kenya Limited, Mumias-Cogeneration and OrPower 4.
Koome and Shahbal also owns Gulf Energy Holdings.
At Gulf Energy Holdings, Shahbal owns his stake through a company called Monte Carlo Investments Limited where he owns 100 per cent of the ordinary shares while Njogu owned his shares directly with a 20 per cent stake.