NAIROBI, Kenya — The Kenya Electricity Generating Company (KenGen) has come under fire after procurement irregularities forced the cancellation of a Sh2.5 billion tender for carbon credits, sparking accusations of favoritism, unfair exclusion of bidders, and possible cartel behaviour.
The Public Procurement Review Board (PPRB) recently ordered the tender process to be restarted.
KenGen planned to sell 4.62 million carbon credits, certified emission reductions (CERs), originating from six of its clean-energy projects. These included geothermal developments like the Olkaria II expansion and hydroelectric initiatives such as the Tana and Kiambere plants.
The credits, under Kenya’s Clean Development Mechanism (CDM) projects, were expected to fetch around Sh2.5 billion (roughly US$19.6 million).
The tender attracted bids from several parties, among them Munja Trading Ltd in joint venture with Marwil Energy Holding AS, as well as Sintmond Group Ltd and Kyoto Network Ltd.
When the tender evaluation was underway, Sintmond was disqualified at the preliminary stage. The cause: alleged failure to produce both client references and evidence of previous carbon credit transfers.
However, PPRB found that the tender document used “and/or” instead of “and” — meaning the requirement was optional, rather than mandatory, making the disqualification unfair.
Other irregularities flagged by PPRB included:
- Ambiguous clauses in the tender documents created confusion over what was mandatory.
- The use of a non-standard two-stage evaluation process (preliminary filtering followed by financial evaluation), which the board found risky when public funds are at stake, because it can limit proper vetting of bidders’ capability.
In its ruling, the PPRB nullified KenGen’s decision to award the tender to the Munja-Marwil consortium. The board directed KenGen to reopen the bidding process with clearer, fairer requirements.
For KenGen, this is not the first time carbon credit sales have been disrupted by procurement disputes. Previous tenders have similarly collapsed under bidder complaints or failure to fulfil contractual terms.
The episode has raised serious questions about transparency, fairness, and oversight in Kenya’s carbon credit market.
Carbon credits are increasingly important both for Kenya’s efforts to combat climate change and for attracting international investment under schemes tied to emission reduction. When the tender process is flawed, both credibility and potential financial inflows suffer.
Moreover, the case has put a spotlight on how technicalities in procurement documents can be used, intentionally or otherwise, to exclude bidders, potentially favouring certain companies.
Observers are now calling for better standardization of tender documents, improved clarity in criteria, and stronger oversight mechanisms to prevent similar controversies.
KenGen now faces the task of revising the tender, ensuring compliance with procurement laws, and restoring confidence among bidders and the public alike. How the relaunch is handled could set an important precedent for Kenya’s carbon economy and wider state-procurement integrity
