Kenya wins Sh538m in Suswa fields case against WalAm Energy

Sunday July 12 2020

Attorney-General Kihara Kariuki is pictured at the Reinsurance Plaza in Nairobi on June 18, 2019. PHOTO | DENNIS ONSONGO | NATION MEDIA GROUP

By Elvis Ondieki

Kenya has won a multi-billion shilling case against a Canadian-American energy firm relating to geothermal fields in Suswa, the Attorney-General announced Saturday, saying the country will be paid over Sh538 million.

AG Kihara Kariuki said in a statement that a case WalAm Energy Inc filed in 2015 at the International Centre for Settlement of Investment Disputes (ICSID) ended on Friday with a favourable verdict for Kenya - a dismissal of the complaint.

“The implication of this ruling is that the Ministry of Energy and the Geothermal Development Company are now at liberty to exploit the geothermal resources in the Suswa geothermal fields and grow the energy capacity of Kenya,” stated Mr Kariuki.

The dispute was about licensing. In 2007, WalAm was awarded a Geothermal Resources Licence by the then Energy minister Kiraitu Murungi, now the Meru governor.

The licence gave the firm, whose headquarters are in Canada, exclusive rights to exploit the geothermal resources in Suswa. It would last 30 years.



However, the government revoked the licence in 2012 “after discovering that WalAm had not performed its duties under the license and did not have capacity to undertake the required exploration” as stated in the AG’s statement yesterday.

Aggrieved, WalAm filed the case at ICSID, which was heard in London in 2018. It wanted Kenya compelled to pay $339.6 million (Sh36.4 billion) and to reinstate its licence.

Kenya, however, won the duel as the tribunal dismissed the case and ordered WalAm to bear the costs that Kenya spent in responding to the accusations.

“WalAm shall therefore pay the Government of Kenya $648,857.75 (Sh70,067,637 million) corresponding to its share of the costs in the arbitration,” Mr Kariuki stated.

“WalAm shall also reimburse 75 per cent of the Government of Kenya’s legal fees and expenses,” the AG said, listing the amounts as £3,586,039.38 (Sh441,082,797) and $252,262.82 (Sh27,244,384.60).

The total amount WalAm is to pay Kenya is Sh538,394,819.