Credit Bank Ltd, a Nairobi-based commercial bank owned by the family of the late Kenyan politician and businessman Simeon Nyachae, has won court approval to recover nearly Ksh80 million ($618,529) from Kenyan coal investors after a failed energy project, in a ruling that underscores rising risks in Africa’s project financing space.

The High Court cleared the lender to sell properties in Uthiru used as collateral by Foundation Piling Ltd and its directors, Ronald Njoroge King’ang’i and Bella Wagatwe King’ang’i, tied to a 2017 loan financing coal exploration in the Mui Basin. The decision highlights growing loan defaults linked to stalled energy projects in Kenya.

Court backs Credit Bank recovery move

The court ruled that the borrowers failed to demonstrate commitment to repaying the loan and did not provide sufficient justification for their prolonged default.

It also confirmed that Credit Bank followed all required legal procedures, including issuing statutory notices before initiating recovery. Claims by the borrowers that the debt was inflated through excessive interest were dismissed, with the court siding fully with the lender.

Failed Mui Basin project at center

The dispute stems from financing tied to the Mui Basin coal project in Kitui County, once positioned as a major solution to Kenya’s energy deficit.

However, environmental concerns, regulatory delays, and shifting policy priorities stalled the project, leaving investors and lenders exposed.

Rising risks in energy project financing

The ruling reflects broader challenges facing project-financed infrastructure across Africa, particularly in fossil fuel sectors facing declining policy support.

Banks are increasingly tightening lending standards as defaults linked to stalled projects rise.

Kenya shifts toward renewable energy

Kenya has accelerated investments in geothermal, wind, and solar energy, reducing long-term reliance on coal projects. The Mui Basin project, once central to the country’s industrialization plans, has lost momentum amid changing environmental and financial dynamics.

Outlook for lenders and investors

Founded in 1986, Credit Bank is linked to Ugandan businessman Ketan Morjaria, a founding shareholder who retains a minority stake and sits on the board. The lender is ultimately anchored by the Nyachae family, its largest shareholder group, with Grace Nyachae, widow of former Kenyan politician Simeon Nyachae, serving as a founding director and board member.

Grace Nyachae, widow of former Kenyan politician Simeon Nyachae, alongside her son Leon Nyachae

The family holds a 27.1% interest in Sansora Group, its investment vehicle, reinforcing its influence over the bank’s strategic direction. Leon Nyachae, Sansora’s managing director and a non-executive director at Credit Bank, represents the next generation of family leadership. Credit Bank is expected to proceed with asset sales to recover outstanding debt, with the ruling likely to reinforce stricter lender behavior toward high-risk extractive and project-financed ventures.