Time flies with great content! Renew in to keep enjoying all our premium content.
Prime
Portuguese firm battling auctioneers selected for mega Embu dam project
The Principal Secretary, State Department for Irrigation Ephantus Kimotho before the National Assembly Blue Economy, Water and Irrigation at Parliament buildings Nairobi on May 22, 2024.
A Portuguese construction company battling creditors in its home country has been conditionally selected to develop the long-delayed Thuci Dam in Embu under a Public-Private Partnership (PPP), raising fresh questions over the financial strength of firms seeking major State infrastructure projects.
A report by the Public Private Partnership (PPP) Directorate shows that the State Department for Irrigation approved an unsolicited proposal by Elevolution Engenharia, SA to design, build, finance, operate and maintain the multi-purpose dam. The proposal received conditional approval in January 2026, pending the fulfilment of several requirements.
Elevolution Engenharia is the main construction arm of Portugal's Elevo Group, which has spent years restructuring after accumulating about €350 million (Sh53 billion) in debt owed to banks, suppliers, tax authorities and other creditors.
Portuguese court records and media reports indicate the group's financial troubles triggered insolvency proceedings, restructuring efforts and enforcement action by lenders.
More recently, Banco Comercial Português (BCP), Portugal's largest private bank, moved to auction shares and bonds linked to the group in a bid to recover part of its outstanding loans.
Despite these challenges, the State Department for Irrigation says the company has not yet received final approval to proceed.
Principal Secretary Ephantus Kimotho said the PPP Committee's approval was conditional and required the firm to demonstrate stronger financial capacity before moving to the next stage.
"The condition is to submit audited financial statements prepared by a reputable independent audit firm in accordance with internationally accepted accounting standards in place of the management accounts initially submitted," Mr Kimotho said.
The company must also provide documentary evidence of its financial capacity and the equity or capital it intends to invest in the project. The final cost of the dam has not been determined, although earlier estimates placed it at about Sh705 million ($5.45 million).
The Thuci Dam project is expected to provide irrigation water to about 27,500 acres in Runyenjes and Chuka Igambang'ombe constituencies, supply treated domestic water to surrounding communities and generate renewable hydropower. It also includes plans for agro-processing, tourism development, biomass energy production and carbon credit initiatives.
The project has remained on the drawing board for years, becoming a recurring campaign issue in Embu.
Initially, the government planned to deliver it through an engineering, procurement, construction and finance (EPC-F) model but later abandoned the approach because of limited public financing.
Instead, the ministry opted for a PPP model under which a private investor would finance, build, operate and maintain the dam before recovering its investment through water charges over an agreed concession period.
The proposed deal comes amid growing scrutiny of Kenya's Privately Initiated Proposal (PiP) framework, which has attracted financially distressed firms pursuing multibillion-shilling projects.
The model came under intense public scrutiny in 2024 after India's Adani Group proposed to redevelop Jomo Kenyatta International Airport and build electricity transmission lines. President William Ruto later cancelled both projects following the indictment of Adani Group founder Gautam Adani and other executives by US prosecutors over an alleged bribery scheme in India. The Adani Group has denied the allegations.
The Thuci Dam proposal is therefore likely to face close scrutiny as the government weighs whether Elevolution can demonstrate the financial muscle needed to deliver one of the region's most anticipated water projects.
