Category: Business Daily

A week ago, as the world reflected on the success of NASA’s Artemis II mission, a quieter but deeply consequential milestone for Africa took place.

The Kenya Space Agency successfully launched the Climate Camera (ClimCam) to the International Space Station, marking a defining moment not just for Kenya, but for the continent.

ClimCam is more than a payload. It is a statement of intent. In an era where climate shocks are intensifying, from prolonged droughts in the Horn of Africa to devastating floods across the region, the most valuable resource is no longer just land or capital. It is data. Timely, accurate, and locally relevant data. In this new reality, data is king.

ClimCam’s artificial intelligence-enabled system will deliver near real-time climate and weather observations. This has far-reaching implications.

With the right institutional linkages, agencies such as the Ministry of Environment, Climate Change and Forestry, the Ministry of Agriculture and Livestock Development, and the National Disaster Operations Centre can shift from reactive to predictive decision-making.

This is where Kenya’s leadership becomes evident. By investing in space-based climate infrastructure through the Kenya Space Agency, the country is positioning itself at the forefront of data-driven climate action in Africa. It is a recognition that effective climate policy must be grounded in evidence, not estimates.

Equally important is the collaborative model behind ClimCam. Developed jointly with the Egyptian Space Agency and the Uganda National Space Programme, and supported by the United Nations Office for Outer Space Affairs and Airbus Defence and Space, the project demonstrates the power of African cooperation in high-technology sectors.

For decades, Africa has relied on external data sources to understand its own climate systems. This dependence has often limited the continent’s ability to design context-specific solutions. ClimCam begins to shift that narrative. It shows that African countries can co-create, co-invest, and co-own critical data infrastructure.

There is also a strategic dimension. As global climate finance becomes increasingly tied to measurable outcomes, countries that can generate credible, high-resolution data will have a competitive advantage. They will not only attract funding but also shape the terms of engagement.

The challenge now is utilisation. Data must move beyond dashboards into policy rooms, farms, and communities. It must inform early warning systems, guide agricultural calendars, and support climate resilience planning at both national and county levels.

As the world looks to the stars for the next frontier, Kenya and its African partners are reminding us of something more immediate: the future of climate action will not be decided in distant orbits alone, but in how effectively we use the data they send back, and in that future, those who control the data will shape the destiny.

The High Court has rejected compensation claims against a State-owned Chinese firm, Sinohydro Construction Limited which accused of damaging underground telecommunications cables that had been installed along a section of the Nairobi-Thika highway.

The court allowed Sinohydro’s appeal and set aside a lower court ruling that had found it liable for destroying fiber cables belonging to Frontier Optical Networks Limited.

The dispute stemmed from an April 2011 incident near the Roysambu KPLC area, where Sinohydro, then undertaking road works, dug trenches that cut through fiber optic cables laid parallel to major roads in Nairobi.

Frontier Optical Networks sued, accusing the contractor of acting ‘negligently and maliciously’ by failing to account for existing underground infrastructure. The company sought compensation for repair costs and associated losses.

But Sinohydro denied liability, arguing it had no knowledge of the cables and faulted the telecom firm for installing them without proper safeguards or approvals.

The High Court agreed, finding that Frontier failed to prove it had obtained mandatory licences to lay cables within road reserves from state agencies such as Kenya Urban Roads Authority, Kenya National Highways Authority and Kenya Rural Roads Authority.

‘These licences are important,’ the court ruled, warning that unregulated installations ‘would amount to an illegality which normally bars compensation of this nature.’

The court found no credible evidence that Sinohydro knew of the cables’ existence before excavation, a key factor in establishing negligence.

‘There was no witness to clearly testify that anyone working on the said road reserves would know that there were cables underneath,’ it said.

The court also faulted Frontier’s evidence, noting that the company relied on a technician who only repaired the cables and did not participate in the initial installation.

That gap, the court held, denied the company the opportunity of comparing the first installation and the second one, raising doubts about whether the damaged infrastructure had been properly laid or documented.

Further weakening the case, Frontier did not produce receipts, detailed cost records, or clear photographic evidence of the alleged damage.

The court also raised concerns over the failure to join key government agencies responsible for managing road reserve as parties to the case. It said their absence left critical questions unanswered.

‘If indeed these bodies knew that there were underground cables, they ought to have warned the appellant (Sinohydro),’ the court observed, adding that liability could shift where such warnings were not issued.

The judge warned that failure to regulate road reserves may certainly create chaos and danger to other subsequent licensed users, underscoring risks to both infrastructure and the public.

“Regulations of road reserves are statutory, and failure to obtain adequate licenses will certainly create chaos and danger to other subsequent licensed users along the road, as it is difficult to know or see what lies beneath,” said Justice Linus Kassan.

The court noted that the telecom firm did not dispute that the Chinese contractor was undertaking the road construction on behalf of the government, but its main contention was that Sinohydro was negligent.

The court found that Frontier had not proven its case on a balance of probabilities and declined to assess damages.

The Kenya Ports Authority (KPA) has provided the shipping schedule and location of the contested Sh11 billion fuel import amid fears that part of the emergency cargo had been consumed over the Easter holidays.

KPA reckons the 60,000 metric tonnes of fuel was lodged on March 27 on its manifest, showing arrival of MT Paloma within the port limits at 02.30am.

KPA Harbour Master Patrick Onyango tabled documents before the Senate Committee on Energy showing the pilot boarded the vessel at around 7:30pm and docked alongside berth No. 1 at the Kipevu Oil Terminal II at 08:42pm.

Mr Onyango told the committee that the vessel discharged the cargo at Kenya Pipeline Company (KPC) tanks, with KPA pocketing port charges of Sh37,707,832 ($290,000.43).

‘KPA maintains a 14-day list of expected vessels in the port which is updated daily and published in the KPA’s website,’ said Mr Onyango.

The State ordered the exit of the contested petrol from the country and barred oil marketers from selling it.

Energy and Petroleum Cabinet Secretary Opiyo Wandayi reckoned that the emergency importation of fuel was in breach of supply contracts Kenya inked with Saudi Aramco Trading Fujairah, Abu Dhabi’s ADNOC GlobalTrading Ltd, and Emirates National Oil Company Singapore Ltd.

But oil executives have poked holes into the State’s directive, saying that it is unrealistic and a populist move that could see banks become jittery over funding importation of fuel.

Moses Tauso, the KPC acting general manager in charge of operations and engineering. had earlier told the Senate committee that despite raising alarm, the fuel still managed to find its way into the market.

‘This was a contingency procurement and even the importer gave a proposal on the quality with a disclaimer that there was an issue with standards and it was known even at the procurement stage,’ said Mr Tauso.

One Petroleum and Oryx Energies were awarded a deal to import an emergency cargo of petrol, each of 60,000 metric tonnes towards the end of March, to avert an outage of the commodity from April 2.

KPC said that it was impossible to retrieve the fuel that One Petroleum delivered, contrary to Mr Wandayi’s assertions that the fuel was recalled.

‘We cannot separate it, it is within our system but the oil is not clogging up our system,’ Mr Tauso told the committee during the session held in Mombasa.

Mr Wandayi added that One Petroleum’s cargo could have led to a rise of Sh14 per litre of fuel in the new prices that came into force from April 15.

But fuel prices jumped with a wider margin. Diesel jumped by Sh30 a litre despite a subsidy and halving of value-added tax 8.0 percent for three months to cushion consumers from a surge in crude prices.

Three top State officials in the energy docket were arrested and later resigned over the deal.

Mohamed Liban, the Principal Secretary for Petroleum, Joe Sang, the managing director of KPC, and Daniel Kiptoo, the director-general of the Energy and Petroleum Regulatory Authority (Epra), resigned two days after their arrest.

KPA also told the committee that it had listed 19 vessels which had brought in fuel from the end of February to mid- April.

The documents that KPA tabled before the committee show that a vessel code-named MT Valery Roma docked on April 14 and discharged 37,000 metric tonnes of fuel under the government-to-government (G-to-G) arrangement.

Another seven vessels carrying different grades of fuel are expected to dock at the port of Mombasa in the next 14 days.

Mr Wandayi, his Trade counterpart, Lee Kinyanjui, and officials of One Petroleum and Oryx are expected to appear before the Senate committee on April 23.

Sameer Africa Plc is targeting the close of a Sh919 million land sale deal by the end of June 2026 as it seeks to settle debt.

The Nairobi Securities Exchange-listed firm said it expects to complete the sale of a 3.75-acre parcel of land valued at Sh919.69 million ($7.12 million) in the second quarter (April-June) of this year.

‘Assets held for sale relate to 3.75 acres of undeveloped leasehold land. The sale was initiated in 2024 and is likely to conclude in the 2nd quarter of 2026. The transaction value of the asset held for sale is $7,128,891 or equivalent Sh919,698,228 at the year-end US dollar closing rate of 129.01,’ the company said in its 2025 annual report.

The company has previously missed three self-imposed deadlines for the sale. Sameer Africa first disclosed the proposed disposal in 2022, setting a 2023 target to conclude the deal.

It planned to use proceeds from the sale to fund an infill project, retire debt and reduce exposure to foreign exchange losses.

The Sameer Infill Project is a Sh260 million industrial warehousing development located at the company’s head office along Mombasa Road in Nairobi.

The project forms part of the firm’s strategic shift from tyre manufacturing towards higher-yield commercial real estate investment.

The company has previously missed three self-imposed deadlines for the sale. Sameer Africa first disclosed the proposed disposal in 2022, setting a 2023 target to conclude the deal.

It planned to use proceeds from the sale to fund an infill project, retire debt and reduce exposure to foreign exchange losses.

The Sameer Infill Project is a Sh260 million industrial warehousing development located at the company’s head office along Mombasa Road in Nairobi.

The project forms part of the firm’s strategic shift from tyre manufacturing towards higher-yield commercial real estate investment.

The High Court has faulted an administrator-led plan to sell assets of Mount Kenya Breweries Limited, a collapsed firm weighed down by Sh5.37 billion in liabilities, citing a lack of transparency.

Raising concerns over secrecy in the court-supervised disposal process, the court said the planned sale by the official receiver breached key transparency safeguards by failing to circulate proposals to creditors and shareholders. It also faulted the process for inadequate stakeholder involvement.

However, the court upheld the administrator’s legal mandate to proceed with the asset sale, affirming that the official receiver is entitled to dispose of the company’s assets where rescue is no longer feasible.

The dispute arose after the company’s directors – Caesar Ngige, Salomon Wahome and Mary Muthoni – challenged a tender issued in November 2025 inviting bids to purchase land, buildings and machinery.

They alleged gross undervaluation and exclusion from the process.

The directors accused the administrator of acting like a liquidator without following the law, saying no valuation was shared, no creditor meetings were convened, and no formal proposal was circulated.

They also claimed assets were removed or interfered with under the administrator’s watch, risking irreparable loss to shareholders and creditors.

Receiver defence

The official receiver rejected the claims, stating it was appointed on June 7, 2025, following default on loans owed to Kenya Development Corporation, the holder of a Sh90.1 million floating charge.

In an affidavit sworn by Sylvia Githungo, the receiver told the court the company had ceased operations years earlier and could not be revived without significant capital injection.

A site visit in July 2025 revealed extensive vandalism, with buildings damaged and equipment stripped. The administrator said the destruction occurred before it took control.

The receiver said that as of December 2025, the company’s known liabilities stood at Sh5.37 billion against assets valued at Sh50 million.

Two valuation reports showed a sharp decline in value, with an earlier estimate placing assets at Sh69 million before a later assessment gave an open market value of Sh50 million.

With liabilities running into billions, the administrator argued there was no realistic prospect of rescuing the company as a going concern.

It added that administration costs had already been incurred and continue to rise, with monthly expenses of Sh200,000 required to preserve and safeguard the premises.

The brewer, based in Nanyuki, was once positioned as a regional manufacturing venture but has remained dormant for years.

Court filings show loan defaults date back to around 2019, with the facility falling into disrepair before administration.

The receiver said it opted to sell the assets for the benefit of creditors, citing Section 569 of the Insolvency Act, which allows disposal of charged property where revival is not feasible.

Court findings

The court agreed that the administrator had the power to sell and was not required to convene an initial creditors’ meeting, given the company’s financial position.

However, it identified a critical procedural failure: although the administrator prepared a proposal within the statutory timeline, it was not circulated to creditors and shareholders.

‘The administrator’s power to sell assets ought to be done in a manner that is transparent,’ the judge said, stressing that circulation of proposals is mandatory even where meetings are not held.

He dismissed the directors’ claims that vandalism occurred under the administrator’s watch, noting there was no supporting evidence, such as police reports.

At the same time, the court rebuked the directors for failing to cooperate, saying they had not provided a statement of the company’s financial position as required.

‘The directors and shareholders should know that the company is in a mess during their watch. Thus, they bear the greatest duty to support measures that ensure the creditors are paid, and the company gets out of the mess,’ the court said.

‘They have no right to take a posture that prejudices the creditors or derives benefits to them at the expense of or before the creditors,’ the judge added.

The court ordered the directors to submit a verified statement of assets, debts, and creditors within 14 days.

The administrator was directed to circulate the proposal within 30 days and secure the company’s assets. Interim orders stopping the sale remain in force until further directions.

Kenya’s newly enacted Virtual Asset Service Providers (VASP) Act, 2025, which imposes tighter checks on digital financial transactions, could help the country exit the global financial crimes watchdog’s grey list, experts say.

Analysts at law firm Bowmans say the new rules mark a major shift by drawing cryptocurrency businesses into the formal financial system, aligning the country with global anti-money laundering standards set by the Financial Action Task Force (FATF).

The Paris-based FATF added Kenya to its list of countries under special scrutiny in February 2024 due to loopholes in countering money laundering and terrorism financing.

‘The Act marks a significant shift for Kenya’s digital economy. It brings virtual asset businesses into the formal regulatory framework through licensing, governance standards, and alignment with Kenya’s anti-money laundering regime,’ analysts at Bowmans said in a note on the VASP Act.

They said the new law could improve Kenya’s standing into a ‘more credible, investor-friendly market’ if effectively implemented.

When a country is grey-listed, its banks face tighter due diligence from foreign lenders, some international transactions are delayed, and investors flag compliance risk in country assessments.

Kenya hopes to be removed from the global financial crimes watchdog’s ‘grey list’ by May 2026 as it tightens its tools to detect and block illicit money flows.

‘Everyone should go do their work to ensure we are out of that grey list by May,’ Treasury Principal Secretary Chris Kiptoo said in February.

Kenya says it is sharpening its tools to detect money laundering and terrorist financing and aims to operationalise Anti-Money Laundering and Countering the Financing of Terrorism Committees.

Under the International Cooperation Review Group process, Kenyan financial institutions and designated businesses are implementing stronger Customer Due Diligence measures, including verification of beneficial ownership and monitoring of high-risk transactions.

The Treasury says financial institutions have also heightened Suspicious Transaction Reporting, with enhanced mechanisms to ensure timely reporting and analysis of suspicious financial activities.

Kenya has also adopted an inter-agency coordination approach involving the Directorate of Criminal Investigations (DCI), the Attorney General’s office, and select State departments as part of a strategy to clean up its financial services sector and exit the grey list.

Crypto oversight

The VASP Act places crypto businesses, including platforms dealing in Bitcoin, stablecoins and non-fungible tokens (NFTs), under the joint supervision of the Central Bank of Kenya (CBK) and the Capital Markets Authority (CMA).

Firms dealing in virtual assets are required to obtain licences, conduct Know Your Customer (KYC) checks, report suspicious transactions, and cooperate with agencies such as the Financial Reporting Centre (FRC) and the DCI.

Draft regulations further require stablecoin issuers to file monthly reports detailing transaction volumes, asset holders and reserve composition. Capital requirements range from Sh30 million for brokers to as high as Sh500 million for issuers.

The government has also proposed a 0.05 percent transaction levy on exchanges and token platforms.

Kenya’s crypto market has been expanding rapidly, driven by stablecoin use for remittances, merchant payments and cross-border transactions. Stablecoins are digital currencies whose value is pegged to assets such as the US dollar.

Recently, the country was ranked fifth worldwide by cryptocurrency transaction volumes in the 2025 World Crypto Rankings report by global crypto exchange Bybit. Data from US-based blockchain analytics firm Chainalysis shows that stablecoin transactions worth about Sh426.2 billion ($3.3 billion) were processed in the year to June 2024.

However, the sector has raised concerns among regulators due to its susceptibility to illicit activity, given the pseudonymous and decentralised nature of digital assets.

Industry pushback

Still, the government’s regulatory push has raised concerns among industry players, who say high capital thresholds, transaction fees and compliance requirements risk importing rigid frameworks from traditional finance into a nascent and globally competitive sector.

They argue that the rules could stifle innovation and push startups to more favourable regional jurisdictions.

‘When most of the local crypto startups have not even raised that much equity or debt capital, it becomes hard to do business here,’ Allan Kakai, director at the Virtual Assets Chamber of Commerce, told the Business Daily in a recent interview.

Bowmans cautions that while the legal framework aligns well with FATF standards on paper, its effectiveness will depend on implementation.

‘Practical enforcement, regulatory capacity, and coordination between agencies will be critical,’ the firm said, raising questions over whether CBK and CMA have the technical expertise and resources to supervise the complex and fast-evolving crypto sector.

‘How effectively will coordination work between the two regulators and other key agencies, particularly the Financial Reporting Centre?’

The FRC reported nearly Sh6.976 trillion in suspicious financial transaction reports over three years through 2023, with most (around 91 percent) funnelled through banks.

The report said money is laundered mostly through real estate, lawyers and accountants.

Investors in industrial and medical gas manufacturer BOC Kenya are set for a payout of Sh12.85 per share after the firm’s net profit grew 46.9 percent to Sh311.02 million in the financial year ended December 2025.

The dividend payout, totalling Sh250.9 million, represents a 48.5 percent increase from Sh8.65 per share, amounting to Sh168.89 million, paid on the previous year’s Sh211.65 million net profit. This marks the second consecutive year of increased payouts, following dividends of Sh6.05 per share in both 2022 and 2023.

The dividend – equivalent to 80.7 percent of net profit – positions BOC among the more generous payers on the Nairobi Securities Exchange. Over the six years to 2024, the firm distributed between 59.6 percent and 79.8 percent of its annual net income as dividends.

The company paid an interim dividend of Sh2.50 per share in October last year and has now proposed a final distribution of Sh10.35. This will be paid on or about July 21 to shareholders on the register at the close of business on May 31, 2026.

The firm is 65.38 percent owned by BOC Holdings (UK), followed by Kiuna Ngugi with a 17.91 percent stake.

Earnings growth

In the year ended December 2025, BOC’s revenue grew 18.5 percent to Sh1.43 billion from Sh1.2 billion, driven by increased demand for gas.

‘Revenue increased by 19 percent this year compared to the prior year, driven by strong growth in customer engineering projects and increased demand for medical and industrial gases,’ said the firm in a commentary accompanying the financial results.

The firm added that distribution, selling and administrative expenses declined following cost-control measures implemented by management, further boosting profits.

The board said the company continues to strengthen its leadership in medical gases while expanding its industrial gases footprint by engaging the manufacturing, services, agricultural and fabrication sectors.

‘This strategic approach underpins long-term resilience, broadens market presence, and supports sustainable growth,’ said the firm.

Thousands of taxpayers were granted penalty waivers on Sh4.76 billion owed to the Kenya Revenue Authority (KRA) in breach of amnesty rules, raising questions on the handling of the scheme.

The Auditor-General’s report on the KRA for the year to June 2025 shows that 4,677 taxpayers ben-efited from the scheme without having a repayment plan for the billions of shillings owed in principal taxes.

The audit shows the taxpayers, including individuals and businesses, were forgiven Sh290.48 million penalties and interest, marking a breach of the law since they had not settled the principal taxes.

The report notes that the KRA breached the Tax Procedures (Amendment) Act, 2024, which sets conditions for forgiveness of penalties and interest, including the requirement that one must have fully settled the principal tax or shared a repayment plan.

KRA staff have been previously accused of helping to fraudulently clear cargo and alter records to help people dodge tax payments, leading to revenue losses.

The tax amnesty scheme was aimed at boosting revenues amid pressure on the KRA to weed out tax evaders and raise collections through increased compliance.

‘Review of the tax amnesty uptake indicated that it was granted on penalties, interest and fines of Sh290.48 million to 4,677 taxpayers, despite the taxpayers owing the authority Sh4.75 billion in outstanding principal taxes, relating to tax periods up to 31 December, 2023,’ says the audit report.

‘This was contrary to the Tax Procedures (Amendment) Act, 2024, which requires that, to qualify for amnesty, a taxpayer must have either fully paid all principal taxes or have an approved payment plan under which the outstanding principal taxes would be fully settled by 30 June, 2025.’

Under the law, taxpayers qualify for amnesty after settling the principal tax or tabling an approved payment plan that guarantees full settlement of the principal before June 30, 2025.

The audit, however, indicates that these conditions were not met, yet the penalties were written off.

The programme was first introduced in 2023, granting tax amnesty on penalties and interest for periods up to the end of December 2022. It initially ran until June 2024 before being extended to June 30, 2025, allowing for the waiver of penalties and interest accrued on tax debts for periods up to the end of December 2023.

The KRA has in the past praised the programme for generating Sh29 billion while bringing 3.5 million taxpayers into compliance-a performance it termed as ‘a proof to our balanced approach of enforcement and facilitation.’

The audit findings raise questions on the credibility of the amnesty programme, which was designed to encourage tax compliance while helping the KRA collect principal taxes.

The audit further raises red flags over how the amnesty was implemented in the tax system. It found that there was use of direct record deletions instead of standard accounting procedures, where the trail must remain visible in the system.

The audit found that tax relief amounting to Sh1.29 billion was processed through direct deletion from taxpayers’ ledgers instead of processing them through credit entries.

‘Further, a tax amnesty of Sh1,288,365,274 was implemented by direct deletion from taxpayer ledgers rather than being offset through credit entries. ln the circumstances, management was in breach of the law,’ said the audit.

Under accounting rules of double entry, the tax amnesty should have been recorded as a credit against a taxpayer’s account, preserving an audit trail that shows the original liability, the relief granted and the resulting balance. Direct deletion removes the liability without leaving a clear record of the adjustment, making it difficult to track the application of the amnesty across individual accounts.

The tax amnesty programme was intended to unlock collections from non-compliant taxpayers as part of the country’s tax administration reforms aimed at expanding the revenue base and reducing reliance on debt.

The spotlight on the handling of the amnesty programme came in the period Auditor-General Nancy Gathungu disclosed that the KRA had issued tax compliance certificates (TCCs) to 3,054 taxpayers despite them having Sh3.12 billion tax arrears and without a payment plan in place.

The report indicates that the affected taxpayers had not objected to the tax assessments or entered into any structured payment plans-conditions that would have allowed them to legally qualify for the certificates.

Ms Gathungu’s findings come at a time when the government is under pressure to boost revenue collection amid rising fiscal constraints and public scrutiny over tax fairness.

State House has previously accused the tax collection agency’s staff of cutting government revenue by engaging in corruption, colluding with tax evaders and taking bribes.

President William Ruto also accused KRA staff of resisting and sabotaging attempts to digitise revenue collection in the past to prevent the government from sealing loopholes.

In terms of tax collected as a proportion of annual economic output, Kenya has been underperforming other nations like South Africa as it struggles to widen the tax net.

The KRA’s revenue collections were Sh2.257 trillion in the financial year ended June 2025 against the targeted Sh2.305 trillion, being a Sh48 billion shortfall.

In the current financial year ending June 2026, the KRA is banking on increased deployment of technology and other enforcement tools to raise Sh932 billion in the final three months in a bid to meet its Sh2.97 trillion annual revenue target.

The aggressive final-quarter push comes after the agency collected Sh2.038 trillion by the end of March, the first time it has crossed the Sh2 trillion mark within nine months.

Kenya has turned to the World Bank for rapid additional funding by June to cushion its economy from the shocks of the US-Israel war with Iran.

This means that Kenya now expects a bigger disbursement from the World Bank, much higher than the $750 million (Sh96 billion) loan that was factored into the 2025/26 budget at the beginning of the fiscal year in July 2025.

Kenya’s request for additional financing from the World Bank comes against the backdrop of the recent decline in foreign exchange reserves, which fell by $1.3 billion (Sh167.9 billion) between March 5 and April 9, 2026, to close at $13.3 billion (Sh1.7 trillion), translating to 5.7 months of import cover.

The Central Bank of Kenya (CBK) said that the additional World Bank cash is expected before the close of June 2026 and will be drawn from the multilateral lender’s rapid repose financing schemes. This will mark an additional financing request beyond the earlier targeted $750 million (Sh96.93 billion) Development Policy Operation (DPO) loan to Kenya, which, however, remains withheld due to delays in enacting reforms.

‘We have had very good discussions with the World Bank on the DPO and also getting additional financing, given the kind of shocks that we are facing. We hope that we can reach an agreement with the World Bank on the Rapid Results Operation so that we can get additional financing over and above the Development Policy Operation (DPO),’ CBK Governor, Kamau Thugge, told Business Daily on the sidelines of the just concluded Spring Meetings in Washington, DC.

The CBK did not indicate how much additional funds Kenya targets to receive from the World Bank, but termed it a ‘significant’ amount.

‘Our hope and expectations are that this money will come in this financial year. The amount of financing is yet to be determined, but it is about getting additional financing from already existing commitments which are yet to be disbursed,’ Dr Thugge said.

‘I would say it is a significant amount and could be quite close to the size of the DPO itself. Because this funding has already been approved by the board, there will not be any need for additional approval,’ the CBK boss added.

The multilateral lender uses the DPO to support countries in implementing policy and institutional reforms to achieve economic growth and reduce poverty. The DPOs offer financial assistance in exchange for specific policy changes designed to improve areas like public finance, market efficiency, and climate action.

Kenya has, however, not tapped the DPO loan after the World Bank expressed reservations over delayed reforms linked to the reinforcement of fiscal management, improving governance, and tackling conflicts of interest among public officials.

President William Ruto signed the Conflict of Interest Act on July 30, 2025, as part of Kenya’s attempt to address the impasse with the World Bank.

The Conflict of Interest Act, which came into effect on August 19, 2025, repealed the Public Officer Ethics Act and established a consolidated statutory framework to regulate and manage conflicts of interest within the public sector.

Dr Thugge said that whereas the CBK is comfortable with the present level of foreign exchange reserves at 5.8 months of import cover, there is a need to further strengthen the country’s buffers, given the uncertainty around the US/Israel – Iran War and how long it will last.

‘Over the last two years, we have been able to build our reserves to a fairly sizeable level. It’s important to look at what has happened with the exchange rate. The reason why we built these reserves was to have a very orderly depreciation in the event of a shock. When this crisis happened, the Shilling was at about 129, and it smoothly went up to 130. The ceasefire was announced, and it has since retraced its path back,’ Dr Thugge says.

Kenya is battling renewed inflationary pressure amid disruption in the importation of key items, including petroleum products. The ongoing Middle East war, which first started on February 28, has disrupted activities on the Strait of Hormuz, a global chokepoint serving as an artery for 20 percent of the world’s total oil supply and 30 percent of the world’s maritime trade.

A standoff between the Kenya Electricity Generating Company (KenGen) and its financier, the European Investment Bank (EIB), has stalled a key consultancy tender for the Sh32 billion Olkaria VII geothermal project.

The High Court has now backed KenGen’s decision to terminate the procurement for the consultancy services, quashing a tribunal’s ruling that had ordered the process to proceed despite the funding stalemate.

In a judgment delivered in Nairobi, the court found that the tender could not lawfully continue after EIB declined to issue a mandatory ‘no objection’ letter required under the financing framework.

‘The question is whether KenGen could reasonably be expected to move forward with the procurement process, award contracts, or implement those contracts without confirmed and adequate budgetary provision and funding. The answer is a big NO,’ the judge ruled.

The dispute centres on a tender for consultancy services linked to the Olkaria VII geothermal power plant, one of Kenya’s flagship renewable energy projects.

The 80.3-megawatt power plant in Naivasha’s Olkaria field project was designed to expand the country’s renewable energy capacity and strengthen power supply.

It was formally initiated through feasibility and planning processes beginning in 2022, when KenGen called for studies to support its development. The project gained further momentum with government approvals in 2025, setting it on course for construction and eventual delivery to the grid by 2027.

KenGen had initiated the procurement in September 2024, indicating that the contract would be financed by the EIB and governed by the bank’s procurement guidelines.

Those guidelines required the financier’s approval at every critical stage, including before award and contract execution.

After completing the evaluation and recommending a winning bidder, KenGen sought the EIB’s clearance in January 2026.

The bank declined to approve. KenGen then terminated the tender, stating that without the financier’s concurrence, there would be no funds to meet contractual obligations.

However, the Public Procurement Administrative Review Board overturned that decision in February 2026 following an application for review lodged by Sintecnica Engineering S.R.L in joint venture with Steam S.R.L, the bidder recommended for award of the consultancy tender.

The board had found that KenGen had not sufficiently justified the termination. It ordered the company to proceed with the procurement to its logical conclusion, triggering a court challenge by KenGen.

The High Court found that the tribunal misdirected itself on the legal effect of the donor’s refusal and issued orders that could not be implemented.

‘The financier’s ‘no objection’ was a mandatory condition precedent to award and contract execution,’ the court ruled, adding that treating the requirement as optional amounted to a fundamental error of law.

‘It was not open to the Review Board to direct continuation of a procurement process in disregard of an express financing condition,’ the court said. The ruling further held that the tribunal exceeded its jurisdiction by interrogating and overriding EIB’s decision.

According to the court, decisions relating to donor concurrence fall within the financier’s contractual mandate and cannot be substituted by a local review body.

The judgment also faulted the board for conflating the broader project financing with the specific tender structure.

While the Olkaria VII project is co-financed by multiple partners, including KenGen and other development agencies, the consultancy tender was expressly tied to EIB funding.

The court said the absence of EIB approval meant the procurement could not legally progress, regardless of other funding sources for the wider project.

‘Funding for the overall project does not equate to availability of financing for this particular tender,’ the court noted.

It warned that compelling KenGen to proceed without confirmed financing would expose the public entity to unlawful financial commitments.

The court stressed that public procurement must align with constitutional principles on prudent use of public funds.

‘It would be irrational and unlawful to compel progression of a process that cannot be implemented,’ the judge said.

The decision effectively restores KenGen’s termination of the tender and halts the procurement unless the financier reverses its position or new funding arrangements are secured.