Infrastructure

British Firm to Build Kenya’s Largest Water Reservoir

High Grand Falls Dam will hold 5.6 billion cubic metres of water.

Updated on

January 6, 2025

High Grand Falls Dam Kenya — Ongoing construction of a dam. PHOTO | COURTESY

GBM Engineering Consortium has agreed to build the High Grand Falls Dam in Kitui at a revised cost of Sh235 billion, granting Kenya a better deal to advance the project.

The UK-based consulting engineering firm won the tender eight years ago to finance, design, build, operate, and transfer the dam at an estimated cost of Sh425 billion.

In September 2021, GBM signed a deal with Kenya to update feasibility studies and other technical details to determine the costs before finalising the main contract.

A year later, when President William Ruto took office, the government began negotiations with the firm for a better deal for the project, which has now been successful.

In addition to a Sh90 billion reduction in construction costs, the addendum to the proposal introduces a greenfield solar system that will generate 500 megawatts of power.

The solar farm will span 5,000 acres in the Usueni region of Kitui and will power a green hydrogen fertiliser plant to boost commercial farming within the county.

The addendum also includes plans for two industrial parks, one in Kitui and the other in Tharaka-Nithi, designed to support value addition and agro-processing.

Ephantus Kimotho, the Principal Secretary for Irrigation who chaired an inter-ministerial committee that evaluated the amended financial bid from GBM, recently said the official announcement of the new deal would be made in the New Year.

“The High Grand Falls project will have both the lowest-priced power purchase agreement for clean energy and the water purchase agreement for agricultural irrigation, in addition to the supplementary support projects,” Mr Kimotho said.

Financial proposal

GBM Engineering, along with its new Turkish partners, will finance, design, build, own, and operate the High Grand Falls dam for 30 years to recoup their investment.

According to Mr Kimotho, the government now has a unified financial proposal from the investors for water supply, irrigation, and power generation, where they secured $0.08 (Sh10.24) per kilowatt hour, from the initial proposal of $0.12 (Sh15.36) per kilowatt hour.

“We also secured the most competitive price for water at the lowest rate of $0.04 (Sh5) per cubic metre, which will be highly beneficial for any investor,” he said.

In November 2024, the average cost of electricity in Kenya stood at Sh20.28 per kilowatt hour, while the cost of water in most parts of the country was Sh190 per cubic metre.

Steve Mburu, the Operations Director at GBM Engineering, recently said the company has mobilised a strong consortium of globally reputable firms for all components of the project.

Three Gorges Dam

Among the firms involved is Power China, which built the Three Gorges Dam, with its 22,500-megawatt capacity as the largest installed hydropower capacity.

Power China will build the main dam, alongside GBM Engineering, which has also partnered with RCP Irrigation, a Portuguese firm that built a green hydrogen project positioning Brazil as a leader in decarbonising energy and industry.

RCP Portugal will implement the irrigation aspect of the project.

“GBM Engineering is backed by the UK government, and we have mobilised sufficient technical and financial capacity. We’re ready to hit the ground running to deliver on the clean and green investments and the entire project,” Mr Mburu said.

Tender dispute

GBM was hired for the job in September 2018 following a decision by the Public Procurement Administrative Review Board (PPRB), a state agency that resolves tender disputes, to uphold the award of the contract to the firm.

The company won the deal in a bidding featuring seven companies (five of them Chinese), but the National Irrigation Board (NIB) refused to accept its win.

The matter was escalated to the PPRB, which heard the case and ruled in favour of GBM on July 4, 2018. The agency directed the NIB to conclude the bidding process within 30 days.

NIB disregarded the ruling and cancelled the tender.

The PPRB later ruled that the government had no legal basis to cancel the tender or delay its award to the British firm.

The project seemed to have stalled until November last year when Kenya and the UK signed a deal to expedite British investment projects in the country.

Dubbed High Grand Falls Dam, the water reservoir will be built off Kibuka Falls on River Tana – straddling Kitui and Tharaka Nithi counties.

5.6 billion cubic metres

The dam, which was conceived in 2009, covers 165 sq. km and will hold 5.6 billion cubic metres of water that will nourish the Lamu Port and resort city while adding nearly 700MW to the national power grid.

This makes it the largest water storage facility in the country.

Phase one of the hydro dam project is expected to be operational by 2031 with a capacity of 495MW and will cost Sh250 billion according to government records.

The second phase with a capacity of 198MW will come in a year later – bringing the total capacity to 693MW.

Kenya will not raise funds for the project as the contractor will build and operate the dam for 30 years, to recoup its investment, before handing it over to the government.

Africa’s second-largest dam

On completion, the High Grand Falls Dam will be Africa’s second-largest dam after the 5,250-square kilometre Aswan High Dam in Egypt on River Nile.

The High Grand Falls Dam is part of an ambitious endeavour to build 1,000 mega-dams across the country in a bid to revolutionise irrigation-based agriculture.

Other dams include Twake Dam in Makueni, which will nourish Konza City, Badasa Dam (Marsabit), Hare Dam (Nyando), Sio Dam (West Pokot) and Mwache Dam in Kwale.

In 2014, the government said it had finalised procurement with the China State Construction Engineering Corp to build the High Grand Falls Dam at Sh189 billion.

The project was to be funded through a public-private partnership (PPP) model, with firms from China and the Export-Import Bank of China providing the finances.

Months later, Kenya decided to tender the project afresh under the build-operate-transfer model that does not require it to procure any funding for the project.