A US-based energy firm, WalAm Energy Inc, is in quest of Sh61.8 billion ($600 million) compensation following a botched geothermal project in Kenya.
The firm wants the World Bank arbitration body, International Centre for Settlement of Investment Disputes (ICSID), to make Kenya pay it for ceasing its 30-year exclusive prospecting license in 2012, which it says was done in violation of a deal between it and the government.
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Kenya terminated the license citing that WalAm had failed to honor terms of the contract as concerns construction of power plants.
Attorney-General Githu Muigai has disputed the suit, raising questions on WalAm’s nation of origin.
Prof Muigai says the contract Kenya signed with WalAm showed that it was registered in Canada, yet the company has now presented itself as US-listed.
The AG on Monday additionally argued before the ICSID in London that the firm has no power to sue over the botched geothermal unit; therefore the suit should be thrown out.
“WalAm had represented itself as a Canadian company for purposes of being granted the license.”
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He added that Canada had not approved the Convention on the Settlement of Investment Disputes between States and Nationals of other nations, a contract that gives the ICSID authority to consider such disputes, at the instance Kenya revoked WalAm’s license.
WalAm in the suit claims it put in weighty resources into the project, and that it is in jeopardy of losing its full investment if the ICSID does not order Kenya to pay it the stipulated US $600 million.
The firm was granted an exclusive license to survey, drill for, mine, generate and dispose geothermal steam and other geothermal resources in the Suswa region.
The deal was signed by WalAm and former Energy minister Kiraitu Murungi.
The Suswa geothermal project is among other green energy schemes that have botched in current years together with the Kinangop and Kajiado wind power plants which were terminated last year.
