Centum Investments Company Ltd has written off its Ksh2 billion ($16.39 million) investment in the controversial Lamu coal-fired power plant. The project failed to take-off over environmental concerns and lack of financing.
The carrying value of the investment has dropped to zero in the books in the 2019/2020 financial year, casting doubts on the possibility of recovery.
Chief executive James Mworia told The source that the strategic decision was informed by the need to be “prudent’’ over the investment.
The writing-off comes as the investment firm also suffered a Ksh900 million ($7.37 million) impairment loss on its investment in Akiira Geothermal power project, a 140MW plant under construction in Kenya’s Nakuru County.
Centum invested Ksh1.97 billion ($16.14 million) in Akiira power for a 37.5 percent stake in 2016, but the carrying value of the investment has declined to Ksh1.07 billion ($8.77 billion) as at September 30, 2022.
In the same year (2016) Centum invested Ksh2 billion ($16.39 million) in Amu Power — a joint venture between Gulf Power (developer and co-sponsor) and Centum (co-sponsor) — for a 50 percent shareholding.
However, the project encountered several setbacks, including revocation of an environmental licence, delays in raising funds from banks and an announcement by the technical partner General Electric that it was exiting the coal business.
Amu Power Company was created as a special purpose vehicle by Centum and Gulf Energy Ltd to assemble a consortium of lenders and technical partners to deliver the $2 billion project that has since stalled.
In 2020, the Industrial and Commercial Bank of China (ICBC), which had committed to meet an estimated 60 percent ($1.2 billion) of the project’s development cost developed cold feet towards the plant that was expected to add 1,050 megawatts (MW) of energy on the national grid upon completion.
