US ENERGY FIRM SUES KENYA FOR CANCELLING LICENCE

A screen grab of WalAm Energy Inc's website. In 2012, Kenya cancelled WalAm’s licence for non-performance.

WalAm Energy Inc wants to institute an international arbitration against Kenya for cancelling the firm’s licence for the exploration and development of the Suswa geothermal field.

The firm is represented by Nairobi-based J Miles & Co in the case filed on February 23 at the US-based International Centre for Settlement of Investment Disputes, against Kenya’s Ministry of Energy, and the Attorney General Githu Muigai.

In 2012, Kenya cancelled WalAm’s licence for non-performance. A senior official from the Energy Ministry said WalAm’s licence was cancelled and Suswa field repossessed after the firm failed to carry out an environmental impact assessment study report as required by law.

“The company did not submit any work report to the ministry,” said the official who asked not be named.

Investors holding geothermal resource licences were required to submit EAI reports to the National Environment Management Authority for approval, carry out feasibility studies, drill three wells in three years and put up a power generating plant in a span of five years among other requirements.

‘‘WalAm had limited appetite for risky drilling activities. It was very difficult for it to mobilise the required funds to undertake the initial development activities like drilling and infrastructure,’’ said a senior official in the power industry.

WalAm got the Suswa field due to efforts by the ministry to attract private investors to geothermal exploration as the government did not have sufficient money.

The ministry awarded WalAm and Marine Power Generation Ltd the Suswa and Akiira Ranch concessions in 2007. Africa Geothermal International Ltd was awarded the Longonot concession in 2009.

The East Africa