AfDB Suspends Firms Over Fraud in Kenya Electrification Project

The African Development Bank (AfDB) announced on Tuesday, May 19th, the temporary exclusion of Esiko Kenya Enterprises Limited, as well as Chen Chao and Huang You, for fraudulent practices related to an electrification project in the Republic of Kenya.

The Kenyan civil and electrical engineering company has been suspended for nine months, while the two Chinese nationals have been barred for twelve months. This decision follows an investigation conducted by the African Development Bank‘s Integrity and Anti-Corruption Office.

Irregularities noted by AfDB in an electrification market

According to the findings of the African Development Bank (AfDB) investigation, the parties involved were found to have engaged in fraudulent practices in relation to a contract that covered the design, supply, and installation of single-phase low-voltage power line extensions as well as associated service cables. This contract formed an important component of Phase II of Kenya’s last-mile connectivity project, which is aimed at improving electricity access in underserved areas.

Funded by the African Development Bank Group (AfDB), the broader program is intended to support the Kenyan government’s long-term initiative to expand access to electricity across the country. The focus of the initiative is particularly on reaching disadvantaged populations who still lack reliable access to power. As part of its implementation, the project involves the expansion of the national electricity grid through the deployment and connection of a wide network of transformers, ensuring coverage across all 47 counties in Kenya.

A signal regarding the governance of funded projects

For the duration of the exclusion, Esiko Kenya Enterprises Limited, Chen Chao, Huang You, and any entity under their control will be barred from participating in any activity financed by the African Development Bank Group. Their reinstatement will be conditional upon the expiration of the sanctions and the satisfactory implementation of the required integrity-related corrective measures.

Through this decision, the AfDB reaffirms the importance of control, compliance, and accountability mechanisms in the implementation of the projects it finances. The institution thus reiterates the central role of its Integrity and Anti-Corruption Office, which is responsible for preventing, deterring, and investigating suspected cases of fraud, corruption, and other prohibited practices that could affect the effectiveness and credibility of its interventions.

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(Featured image by Fre Sonneveld via Unsplash)

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First published in Financial Afrik. A third-party contributor translated and adapted the article from the original. In case of discrepancy, the original will prevail.

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