REREC grilled as Sh9.5billion World Bank loan risks going unused
Tana River Senator Danson Mungatana sought answers on pending bills, maintenance responsibilities and possible duplication of funding between REREC and county governments. He also questioned whether all projects listed as completed or under implementation actually exist on the ground.
A Senate committee has opened an inquiry into a Sh20 billion World Bank loan secured by Kenya for rural electrification after it emerged that nearly half of the financing could remain unused when the project closes in September.
The Senate Energy Committee on Tuesday, August 4, 2026 questioned officials of the Rural Electrification and Renewable Energy Corporation (REREC) over the slow implementation of the Kenya Off-Grid Solar Access Project (KOSAP), with lawmakers demanding answers on how billions of shillings borrowed in 2017 have remained largely undrawn.
The probe comes after the Auditor-General Nancy Gathungu raised concerns that only about 53 per cent of the World Bank credit is expected to be utilised by the September 2026 deadline, potentially leaving about Sh9.5 billion unspent.
The project was designed to expand access to electricity and clean water in 14 marginalised counties, targeting communities that have historically remained beyond the reach of the national electricity grid.
But nearly nine years after the financing agreement was signed, senators questioned why the country is facing the prospect of losing access to billions of dollars in development financing while some of the targeted communities remain without the promised infrastructure.
Homa Bay Senator Moses Kajwang’ put the timing of the loan under particular scrutiny, questioning why the government entered into the Sh20 billion financing agreement on September 5, 2017, shortly after the Supreme Court annulled the presidential election.
Kajwang’ demanded to know who authorised the borrowing during the political uncertainty and warned that the Energy Ministry would have to account for the decision.
He said Parliament’s oversight committees could be called in if the ministry and implementing agencies failed to provide satisfactory explanations.
The senators also questioned REREC’s capacity to complete the remaining works before the World Bank financing window expires.
Tana River Senator Danson Mungatana sought answers on pending bills, maintenance responsibilities and possible duplication of funding between REREC and county governments.
He also questioned whether all projects listed as completed or under implementation actually exist on the ground.
The concerns come against the backdrop of mounting scrutiny over Kenya’s management of external loans, particularly the cost of borrowing money that remains undrawn because of delays in implementing projects.
REREC Chief Executive Officer Rose Mkalama, however, defended the agency’s performance, telling the committee that the corporation expects to complete the project by September 30.
Mkalama dismissed suggestions that political events influenced the borrowing or implementation of KOSAP, attributing delays to procurement processes, logistical challenges in remote areas and lengthy community engagement.
She said most disputes involving land acquisition had since been resolved, paving the way for completion of the outstanding works.
REREC Project Manager Francis Mutua told senators that the corporation is implementing only the World Bank-funded component worth about $31 million (approximately Sh4 billion), rather than the entire $150 million (about Sh20 billion) project.
He said completed infrastructure would subsequently be handed over to Kenya Power and county governments for operation and maintenance.
The explanations did little to halt the Senate inquiry.
The committee indicated that current and former officials from the Energy and National Treasury ministries could be summoned to explain the circumstances surrounding the borrowing, delays in implementation and the potential loss of access to the undisbursed funds.
The probe adds to growing concerns over the financial cost of delayed government projects.
Kenya has reportedly paid nearly Sh8 billion in commitment fees over the past five years on external loans that remained largely undrawn, raising questions over whether taxpayers are paying for financing that government agencies are unable to deploy on time.
