World Bank Proscribes PwC Subsidiaries over Fraud in Ethiopia-Kenya Power Project
The World Bank Group has debarred three African subsidiaries of global consulting giant PricewaterhouseCoopers (PwC) in connection with “collusive and fraudulent practices” tied to a billion-dollar power infrastructure program in Ethiopia.
On Thursday, the World Bank announced a 21-month debarment on Mauritius-based PricewaterhouseCoopers Associates Africa Ltd, PwC Kenya, and PwC Rwanda for manipulating procurement and contract procedures involved in a USD 1.2 billion project to integrate the Ethiopian and Kenyan power grids.
The project was approved in 2012 and carried out over the following 12 years using credit from the World Bank’s International Development Association (IDA) and the African Development Bank (AfDB), with the Ethiopian Ministry of Water and Energy receiving nearly a quarter of a billion dollars from the IDA.
The project was finalized in 2024, marking a significant step for Ethiopia’s energy export aspirations and easing Kenyan electricity tariffs. It included the construction of more than a thousand kilometers of transmission lines connecting a power substation in Wolayta-Sodo to the Kenyan power grid. And while the work has been completed and Ethiopia is currently exporting power to its neighbour, the World Bank disclosed this week that officials and consultants involved in the project had engaged in fraud.
A statement issued by the Group reveals that three PwC subsidiaries obtained confidential procurement information from project officials to improperly influence the award of a consultancy services contract in 2019 for the implementation of International Financial Report Standards (IFRS) for the state-owned Ethiopian Electric Power (EEP).
The controversy extends to EEP’s sister company, Ethiopian Electric Utility (EEU), where the Group says foul play was involved in the awarding of an asset valuation contract.
“During the selection and execution [of the contract], PwC Associates misrepresented the availability, qualifications, and employment status of key experts, and failed to fully disclose all subconsultants. This conduct constitutes collusive and fraudulent practices under the Bank Group Consultant Guidelines,” reads the statement.
The debarment makes PwC Associates, PwC Kenya, PwC Rwanda, and any affiliates they control ineligible to participate in World Bank-financed projects and operations, and comes as part of a settlement agreement under which the three companies admit culpability for sanctionable practices, according to the statement. Ashenafi Endale, The Reporter, Times
