Infrastructure

Kenya Seeks Sh20bn PPP Loan for Koru-Soin Dam Project

China Jiangxi recently abandoned work on the site due to pending bills.

Updated on

March 21, 2024

The government is seeking Sh20 billion to restart construction of the Koru-Soin dam, which stalled after a fallout with a Chinese contractor over pending bills.

China Jiangxi had been contracted to build the dam on the border of Kisumu and Kericho counties, but the firm recently abandoned the project over pending bills.

According to Eliud Owalo, the ICT Cabinet Secretary, Kenya is considering PPP after finding the initial plan of fully funding the project from the exchequer unfeasible.

“The original plan to fully fund the project from the exchequer is untenable, therefore the government will change this and use the public-private partnership model to complete the dam,” Mr Owalo said during a weekend tour of the region.

The CS pledged to expedite the project for timely resident benefits.

The Koru-Soin Dam project seemed to progress after China Jiangxi began excavation work after receiving Sh499 million from the State in August 2022.

In November 2023, the Chinese company halted operations, demanding Sh846.5 million before resuming excavation.

“The contractor received an advance payment of Sh499 million, which has been used over the last year to mobilise equipment and workers, set up a contractor’s campsite and a resident engineer’s camp, and conduct geotechnical investigations for the dam site and construction materials,” Julius Mugun, the project engineer, said last November.

Addressing the National Assembly Committee on Blue Economy, Water, and Sanitation, Mr. Mugu also mentioned that the excavation of the spillway was 50% complete.

The Koru-Soin Dam project, initially slated for full funding by the Kenyan government, was expected to be completed in 2027 for Sh19.8 billion.

However, the insufficient budget allocations posed challenges for the contractor to adhere to the project timeline. For instance, in the 2022/2023 fiscal year, the project was allocated Sh100 million, far below the required Sh3 billion budget.

China Jiangxi was hired to build the dam on May 11, 2022, after quoting Sh20 billion for the project—33% less than what the State had budgeted for the project.

The Koru-Soin Dam, whose studies were started in 1982 by Italy and taken over by the Kenyan government in 2009, will be located in Nyando and Ainamoi sub-counties across River Nyando – about 5km upstream of Muhoroni town.

The dam will store up to 93.7 million cubic metres and supply about 72,000 cubic metres of water daily for domestic and institutional use, as well as irrigation of 2,570 hectares of land.

On completion, the Soin Koru Dam is also expected to generate 5MW of hydropower that will be injected into the national grid.