Treasury receives Sh785 million rejected by German bank

economy

Treasury receives Sh785 million rejected by German bank


Chief Secretary of the National Treasury Julius Muia. PHOTO | SALATON-NJAU | NMG

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Summary

  • Secretary-General Julius Muia said the money had been transferred to the Treasury more than a year and a half after the LTWP notified Kenya Power, the Energy Department and the Treasury Department of the excess payment.
  • The lender denied reimbursement for idle fee overpayments paid in 2018, citing a lack of sufficient information about the ultimate beneficiary of the millions of shillings deposited into the CBK account.

The Treasury has finally received 785 million shillings rejected by Standard Chartered Bank #ticker:SCBK in Frankfurt, Germany, after Lake Turkana Wind Power (LTWP) returned overpayment money from Kenya Power.

Secretary-General Julius Muia said the money had been transferred to the Treasury, more than a year and a half after LTWP Kenya Power informed #ticker:KPLC , the Energy Ministry and the Treasury of the excess payment.

The lender denied reimbursement for idle fee overpayments paid in 2018, citing a lack of sufficient information about the ultimate beneficiary of the millions of shillings deposited into the CBK account.

It also demanded documentary evidence of the payment amid heightened oversight by Germany’s financial regulator BaFin over money laundering violations, which has seen lenders in the European country fined billions of shillings.

“The money has been fully transferred to the state treasury account. I don’t know why Kenya Power and the Department of Energy took a long time to recover the excess payments,” said Dr. muia

The Marsabit-based energy company has been trying to pay back the money to Kenya Power since December.

The Marsabit-based energy company said it transferred the money to the Frankfurt account in December after Kenya Power provided CBK bank details for the transfer.

But Standard Chartered Bank in Germany refused the cash and returned it to the LTWP account, claiming it failed to meet customer due diligence requirements and calling the cash transfer suspicious.

The energy company submitted a letter to Parliament, which it sent to Kenya Power, and recorded its frustrations over the Sh790 million refund, which few government officials wanted to be associated with.

The generator has contacted Kenya Power three times and the CBK twice since December 23 to obtain the necessary documentation to transfer the overpayment.

“To put it bluntly, there was an error in how quickly the correct account details should have been issued. We are considering what should be done administratively or otherwise,” said Dr. muia

He told MPs that the Treasury needed time to inquire if interest had been received from LTWP for keeping the Shs785million for a year and a half.

MPs have questioned an overpayment of Sh785 million in 2020 to LTWP for energy not consumed by taxpayers.

The payment followed delays in building the transmission station to evacuate power from the 40,000-acre Loyalangalani wind farm in Marsabit County to the national grid.

The investor received EUR 45,197,003 (Shh 5.7 billion in 2021) when it was owed EUR 39,023,703 (Shh 4.9 billion), hence the excess of EUR 6,173,296 (Shh 785 million).

LTWP commissioned its 310-megawatt power plant on January 27, 2017, but the government that built the evacuation line did not complete the work until September 24, 2019.

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