National Treasury scraps Sh337 billion High Grand Falls dam project, citing failed evaluation report

The National Treasury has officially cancelled the Sh337 billion High Grand Falls dam project, a flagship infrastructure initiative that was expected to generate up to 1,000 megawatts (MW) of hydropower and supply irrigation water to three counties.

According to newly released disclosures, the government approved the termination of the project during the first week of July 2025.

The Treasury said the decision was based on a critical review of the project development report (PDR), which failed to meet key regulatory requirements.

“An evaluation of the report concluded that the PDR did not meet a number of key requirements. On July 2, 2025, the termination of the project was approved in accordance with Section 43(11)(c) of the PPP Act,” the Treasury said.

The project, spearheaded by UK-based GBM Limited in collaboration with Power China and Portugal’s RCP Irrigation, was to be built along the Tana River. It was initially designed to supply 500MW of power, with plans to eventually scale up output to 1,000MW.

The dam was also intended to store approximately 5,600 million cubic metres of water for irrigation, covering 400,000 acres across Kitui, Tharaka-Nithi, and Embu counties.

Despite the cancellation, the Treasury noted that the project could be revived under revised terms through an open and competitive bidding process.

“The contracting authority may, however, consider subjecting the project to an open competitive tender,” it said.

The High Grand Falls dam had been positioned as a key contributor to cheaper energy, with power from the project estimated to cost $0.08 (about Sh10.34), compared to earlier estimates of $0.12 (Sh15.51).

The three partner firms were to finance, build and operate the dam under a 30-year build-operate-transfer model, after which ownership would revert to the Kenyan government.

The shelving of the mega project raises fresh questions about the execution and viability of Kenya’s public-private partnerships, especially in critical infrastructure meant to alleviate water scarcity and energy shortfalls.