By Benadeta Mwaura - Reporter
Kenya, July 13, 2026 - The Court of Appeal has ordered a fresh review of a disputed Kenya Electricity Generating Company (KenGen) carbon credits tender, ruling that procuring entities cannot introduce new evaluation criteria during the due diligence stage of a procurement process, in a landmark decision expected to influence future public tenders involving climate finance and carbon markets.
According to court documents, the appellate court allowed an appeal filed by Sintmond Group Limited, overturned an earlier decision by the Public Procurement Administrative Review Board (PPARB) and directed that the dispute be reconsidered by a differently constituted review panel.
The judges held that while public entities are entitled to conduct due diligence on bidders, the exercise must remain within the criteria disclosed in the original tender documents and cannot be used to introduce fresh requirements after bids have been submitted.
The dispute revolves around Tender No. KGN-SALE-005-2025, which involves the sale of 6.38 million Certified Emission Reductions (CERs), commonly known as carbon credits, valued at approximately KSh2.5 billion. Carbon credits are generated through projects that reduce greenhouse gas emissions and are traded globally by governments and companies seeking to offset their carbon footprints.
Sintmond Group argued that although it had satisfied the mandatory requirements set out in the tender documents, KenGen later introduced additional evaluation standards during the due diligence phase, effectively changing the rules after the procurement process was already underway.
The Court of Appeal agreed with the firm's position, stating that due diligence should only be used to verify information already submitted by bidders and not to establish new benchmarks or demand different forms of evidence.
"Such due diligence must remain anchored to the disclosed tender criteria. It may not be used to introduce fresh evaluative criteria, impose new benchmarks, or require compliance through a different category of evidence," the Court ruled.
According to the judges, permitting procuring entities to alter evaluation standards after bids have been submitted would undermine the principles of fairness, transparency and equal treatment that underpin Kenya's public procurement framework.
Instead of determining the successful bidder, the Court directed the Public Procurement Administrative Review Board to hear the matter afresh before a new panel while applying the legal principles outlined in the judgment, particularly regarding the limits of due diligence under Section 83 of the Public Procurement and Asset Disposal Act.
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The ruling reverses a series of earlier decisions that had largely favoured KenGen. In May this year, the High Court had cleared the power producer to proceed with the tender after dismissing Sintmond Group's judicial review application, finding that the procurement watchdog had acted within the law.
The latest judgment effectively reopens one of Kenya's most closely watched procurement disputes in the fast-growing carbon market, delaying the planned sale of KenGen's carbon credits until the review process is completed.
The decision is expected to set an important legal precedent for future government procurement, particularly as Kenya seeks to expand its participation in international carbon markets. Analysts say the judgment reinforces the requirement that public procurement processes remain predictable and transparent, especially for high-value transactions involving climate finance and environmental assets.
KenGen has emerged as one of Africa's leading renewable energy producers, generating carbon credits through its geothermal, hydro and wind power projects. The company has increasingly positioned carbon trading as a strategic source of revenue as global demand for verified emission reductions continues to grow.
The Court also ordered each party to bear its own legal costs, citing the prolonged nature of the dispute and the broader public interest involved in clarifying procurement rules for future tenders.