How Sintmond's bitter fallout with Kengen cost it Sh3bn carbon deal

A local energy firm has lost out on a multibillion shilling carbon credits deal with the Kenya Electricity Generating Company (Kengen) due to soured relations from a near similar deal last year. 

Sintmond Group, which describes itself as an energy solutions company, has lost on a bid to buy 6.38 million Certified Emission Reductions (CERs) that Kengen had offered for sale through a competitive tender. This was despite Sintmond having emerged as the highest bidder having offered to buy the carbon credits at Sh2.99 billion, Sh400 million than the second highest bidder which ended up bagging the deal.

A decision by the Public Procurement Administrative Review Board (PPARB) on October 27 gave Kengen the greenlight to sell the carbon credits to a joint venture between Munja Trading Limited and Marwil Energy Holding AS, dismissing a case that Sintmond had lodged at the tribunal seeking to nullify the award to the Munja-Marwil joint venture.

It was the second case in two months that Sintmond had lodged a request for review at PPARB, having won the first round, in which it had argued that had been unfairly knocked at the preliminary stage despite having offered the highest bid for Kengen’s CERs. The board had in a decision on August 28, 2025 directed Kengen to redo the tender and consider Sintmond’s financial bid. 

In September this year, Kengen reevaluated the tenders. The energy producer found the bids by Sintmond and the Munja-Marwil JV to have met all the requirements at the preliminary stage, with one other bid by Kyoto Network Limited dropped after it was found to have been non responsive. 

The two firms proceeded to the financial evaluation stage and were found to have submitted bids with similar prices, following which Kengen invited them to offer “their best and final offers under competitive negotiations”. The new bids were slated to be made between September 8 and 11. 

Kengen told PPARB that the Munja-Marwil JV did not submit a final offer but Sintmond submitted a final offer, bidding to buy the CERs at $23.2 million (Sh2.99 billion).

According to submissions by Kengen, “the applicant (Sintmond Group) was accordingly ranked as the best evaluated bidder for the purposes of award of the subject tender”.

But things would shortly take a turn with the ghosts of the 2024 flopped deal coming to haunt Sintmond. Kengen submitted to PPARB that in a September 19 due diligence report on the firm resulted in its being knocked out a second time.

“Upon conclusion of the due diligence exercise, the Evaluation Committee observed that the applicant (Sintmond) had previously been awarded a tender by Kengen for the sale of 4.58 million CERs… dated May 7, 2024 at a contract price of $32.05 million (Sh4.13 billion),” said Kengen in its submissions at PPARB.

“However, the applicant failed to honour its contractual obligations under the said contract.”

According to Kengen, the evidence by Sintmond Group on its prior experience in buying carbon credits also pointed at a firm that lacked capacity to undertake what it deemed as a large transaction. 

The firm had previously participated in the acquisition and retirement of carbon credits at a small scale, which Kengen noted, cast doubt on its capability to finance the purchase of the 6.38 million tonnes of CERs that it is offering for sale.

The power producer said that in its bid documents, Sintmond had indicated that it had bought 100 units of Verified Emission Reductions (VERs) from the Verified Carbon Standard (VERRA) and another 100 units from the Clean Development Mechanism (CDM) at a price of$102 (Sh13,158). 

“The Evaluation Committee established that the total amount paid by the applicant (Sintmond) for the purchase of carbon credits was $180, equivalent to Sh23,384.50 (based on the exchange of Sh129 to the US dollar),” said Kengen.

“The Committee noted that the submitted evidence of purchase, valued at Sh23,284.50 was manifestly low and inadequate to demonstrate the applicant’s capacity to procure 6.38 million CERs at the final price of $23.21 million (Sh2.99 billion).”

“The committee concluded that the applicant did not meet the due diligence requirements relating to technical and financial capability and was therefore not qualified for award of the contract. Consequently, the committee continued to consider the next responsive evaluated bidder.”

Kengen further conducted due diligence on the Munja-Marwil JV, and noted that the “results… were satisfactory”. The joint venture, Kengen submitted to the procurement review board, had demonstrated the requisite experience, technical competence and financial capacity to perform the contract.

The Evaluation Committee then recommended the award of the tender to the joint venture.

The Munja-Marwil JV had bid to buy Kengen’s 6.38 million tonnes of carbon credits at Sh2.53 billion ($19.64 million) 

In the decision on October 27, PPARB dismissed Sintmond Group’s request for review and directed Kengen to proceed with the tender for the sale of the CERs while extending the tender by another 21 days.

Earlier in the tender process that had begun in May this year, Sintmond had been knocked out at the preliminary stage after failing to meet one of the requirements that required bidders to "demonstrate previous successful participation in Emission Reduction trading or transactions of CERs or VERs by submission of client references and or evidence of CERs transfer or Voluntary Cancellation Certificates from successful purchase of CERs."

Kengen at the time told Sintmond that it was not successful as it failed to demonstrate any transfer of CERs to a client or on behalf of a client as required under this requirement. Documents that the firm had provided showed that the CERs purchased were for voluntary offsetting of its own business activities, which Kengen considered as an internal transaction that did not amount to a client-related transaction as envisaged in the requirement.

Kengen would go on to award the tender to Munja-Marwil JV, which Sintmond however protested and lodged a request for review at PPARB on August 7. Sintmond also said it had offered the highest bid The review board in an August 28 decision directed Kengen to re-evaluate the tenders.