Kenya Electricity Generating Company (KenGen) faces a possible write-off of more than Sh363 million after Stima Investment Co-operative Society failed to repay fixed deposits placed by the power producer’s charitable foundation more than a decade ago.
The KenGen Foundation invested Sh100 million in two equal tranches of Sh50 million each between 2015 and 2016. The money was placed in what Stima Investment described as a real estate fixed-deposit arrangement. Interest was to compound at roughly 16.3 percent on a continuous rollover basis, a rate well above the 10.85 percent average yield on 364-day Treasury bills at the time.
How the Debt Grew
Stima Investment made one partial repayment of Sh10 million in September 2021. By 30 September 2024 the foundation’s claim had risen to Sh363.03 million. Unable to recover the funds, KenGen Foundation filed Commercial Suit E625 of 2024 at the High Court in Nairobi on 24 November 2024.
Stima Investment admitted liability for only Sh90 million and offered 19 one-bedroom units in Ruiru, Kiambu County, as settlement. KenGen rejected the offer. In a ruling delivered in September 2026, the High Court entered judgment on admission for the Sh90 million and directed that the contested balance proceed to full trial.
Auditor-General’s Findings
Auditor-General Nancy Gathungu, in her report on KenGen, noted that management could not produce evidence of board approval for the placement, an investment policy governing such decisions, or any due diligence conducted before the money was transferred. She concluded that recoverability of the investment remains doubtful.
The absence of an investment policy and formal approvals has left the foundation exposed. The high rate offered by Stima Investment sat above the cooperative’s own internal 12 percent cap at the time, yet the placement went ahead without documented risk assessment.
Continued Funding Despite the Dispute
Despite the ongoing legal battle and the Auditor-General’s doubts over recoverability, KenGen continued to fund the foundation. The company donated Sh100 million to the KenGen Foundation in the financial year ended June 2026.
The investment was made during the tenure of former KenGen chief executive Albert Mugo. The foundation itself was established in 2012 as a public charitable trust. The money that was placed with Stima Investment formed part of its endowment.
Wider Context
Stima Investment has faced separate governance challenges in the past. A 2019 Deloitte forensic audit led to the dissolution of its entire board after findings of roughly Sh500 million in irregular land purchases. The current dispute with KenGen Foundation adds to a pattern of difficulties with its real estate investment products.
Read also:KenGen Kenya: Contacts, Head Office, Power Plants & Services 2026
The High Court has already entered judgment for the admitted Sh90 million. The remaining balance, which the foundation claims exceeds Sh270 million after the admission, will now be determined at trial. Until that process is concluded, the full recovery of the original investment remains uncertain, and the risk of a substantial write-off stays open.
The case underscores the exposure that can arise when charitable endowment funds are placed in high-yield real estate deposits without documented approvals, investment policies or due diligence. KenGen continues to support the foundation while the High Court process runs its course.
Sources:
Business Daily – KenGen risks losing Sh363m in Stima Investment Co-op (3 November 2026)
Kenya Insights – KenGen To Lose Sh363 Million In Stima Investments Cash Deposits (3 November 2026)
Kenya Law – Kengen Foundation v Stima Investment Cooperative Society [2026] KEHC 13788 (KLR)