Kenya secured 16 billion shillings loan for Arror and Kimwarer dams in fraud investigation

Economy

Kenya secured 16 billion shillings loan for Arror and Kimwarer dams in fraud investigation


Ex-Trésor CS Henry Rotich. PHOTO FILE | NMG

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Summary

  • Court documents from Director of Public Prosecutions Noordin Haji allege that Mr Rotich facilitated direct payment of the amount to Italian SACE insurance, contrary to the law, which requires all payments to be processed through the consolidated account in Kenya.
  • The state believes that the pressure to bypass the transfer of the money to the Consolidated Fund was designed to facilitate bribes and bribes.
  • The government made 19 billion shillings in advance payments, including the 11 billion shillings of unnecessary debt insurance, which prosecutors said were distributed to accounts belonging to the conspirators and their agents.

Kenya received 16.2 billion shillings from Italian bank Intesa San Paolo for the construction of the Arror and Kimwarer dams during a period when investigations into the embezzlement in the project were ongoing.

The Treasury’s public debt register shows the Italian bank wired billions in the year starting July 2019, just days after former Treasury Cabinet Secretary Henry Rotich was arrested on suspicion of financial misconduct related to the construction of the two dams.

This suggests that the arrests or the ongoing investigation into a suspicious loan deal to finance the construction of the Arror and Kimwarer dams have not stopped Intesa San Paolo from releasing additional debt for the project.

The register shows that Kenya had received 3.4 billion shillings before July 2019, when reports and investigations into allegations of financial misconduct related to the construction of two dams were in the public domain.

In September 2019, President Uhuru Kenyatta canceled the projects after receiving a report from a technical committee, which he had formed following the discovery of irregularities and irregularities surrounding the two mega infrastructure projects.

The cancellations came in a fiscal year when the Arror dam received 11 billion shillings while an additional 5.2 billion shillings intended for Kimwarer was transferred to Kenya. The Spanish company was supposed to shell out a total of 74.3 billion shillings (578.2 million euros) repayable over 14 years from May 2021.

The Treasury did not respond to our request for comment on whether the loans were processed after the project was canceled and whether they have started making payments.

“Kimwarer Dam loan in the amount of EUR 258,688,881.72 repayable in semi-annual installments starting May 9, 2021 and ending November 9, 2035. Debt Register says.

Prosecutors said Mr Rotich allegedly helped an irregular offshore payment of 11 billion shillings to an Italian insurance company involved in a suspicious loan deal to finance the construction of the Arror and Kimwarer dams, raising concerns about bribes to officials involved in projects.

Court documents from Director of Public Prosecutions Noordin Haji allege that Mr Rotich facilitated direct payment of the amount to Italian SACE insurance, contrary to the law, which requires all payments to be processed through the consolidated account in Kenya.

The state believes that the pressure to bypass the transfer of the money to the Consolidated Fund was designed to facilitate bribes and bribes.

The government made prepayments of 19 billion shillings, including 11 billion shillings of unnecessary debt insurance, which prosecutors said was distributed to accounts belonging to the conspirators and their agents.

Mr Rotich is accused of hiding behind government-to-government procurement contracts for a single SACE source, privately owned, and of creating exorbitant 11 billion shillings in coverage for the dams project, which barely had started because the designs had not been drawn while the Kenya Forest Service refused to provide land. There were also concerns that entrepreneur CMC Di Ravenna-Itinera JV had gone bankrupt even after receiving 7.2 billion shillings upfront for the project.

Evidence presented to the court showed that CMC Di Ravenna-Itinera JV received 4.3 billion shillings on September 27, 2018 as an advance payment for the Arror dam. For Kimwarer, an advance payment of 3.5 billion shillings was approved on July 2, 2018.

The two-installment payment for the Kimwarer and Arror dams was made to a network of associated companies in Kenya, South Africa and Italy.

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