🌍 Carbon Credit Series - An Update on Bidding Requirements

The Court of Appeal reiterates the disjunctive interpretation of Mandatory Requirement 16 in Carbon Credit tenders, reinforcing fairness and consistency for bidding companies in Kenya.

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MR-16 provided as follows: "Bidders shall provide at least three (3) client reference letters for similar assignments involving Certified Emission Reductions (CERs) and/or Verified Emission Reductions (VERs), and/or documentary evidence demonstrating successful CER/VER transactions undertaken by the bidder.

In its initial review, High Court of Kenya settled that under MR-16, a bidder could satisfy the requirement disjunctively, i.e. either by furnishing either client references or documentary evidence of prior CER/VER transactions, or both. The Review Board was therefore ordered to apply that interpretation of MR-16 to the received bids.

However, Sintmond Group Ltd contended that the Review Board's due diligence exercise had strayed beyond lawful verification and had become a disguised re-evaluation. Its complaint was that KENGEN had effectively elevated additional references into a decisive criterion, notwithstanding the earlier settled interpretation of MR-16. The Board upheld its decision that Sintmond Group Ltd had failed to establish sufficient capacity to handle CER transactions.

It argued that while the Review Board retained authority to rehear the matter upon remittal from the High Court, it lacked jurisdiction to reopen or circumvent the settled legal interpretation that MR-16 was disjunctive and that the Review Board could not do directly - namely, restore client references as a mandatory requirement; it equally could not do indirectly through due diligence.

The Court of Appeal agreed. While the Procuring Entity retains the right to conduct due diligence, it had to operate within the legal boundaries created by the settled interpretation of MR-16. The Court of Appeal therefore ordered a fresh consideration shall be undertaken by a differently constituted panel of the Public Procurement Administrative Review Board.

Core Legal Framework

Article 227(1) of the Constitution provides that when a State organ or public entity contracts for goods or services, it must do so through a system that is:

  • fair;

  • equitable;

  • transparent;

  • competitive; and

  • cost-effective.

Section 80(2) of the PPADA provides that evaluation and comparison must be undertaken using the procedures and criteria set out in the tender documents. The criteria should, to the extent possible, be objective and quantifiable.

Case Summary

The Kenyan carbon market is entering a more sophisticated phase. Carbon credits are increasingly being treated not merely as environmental instruments, but as commercially valuable assets capable of generating significant revenues for project developers, public entities, investors and intermediaries.

Against this backdrop, the recent Court of Appeal decision in Sintmond Group Ltd v Procurement Administrative Review Board & Others (Civil Appeal E445 of 2026), on the importance of procedural fairness and consistency in the interpretation of requirements for companies bidding on Certified Emission Reductions (CER) tenders in Kenya, is significant.

The dispute arose from the disqualification of Sintmond Group Ltd from qualification under Kenya Electricity Generating Company PLC's ("KenGen") tender for the sale of Certified Emission Reductions for failing to provide references under Mandatory Requirement-16 ("MR-16"). 

Pre-Qualification Recommendations

From a bidder's perspective, Sintmond reinforces the importance of treating tender compliance as a legal exercise rather than simply a commercial one.

Third: conduct your own carbon-credit due diligence.  Independently verify:

  • registry status;

  • credit ownership;

  • project registration;

  • methodology;

  • verification status;

  • transferability;

  • Article 6 eligibility;

  • host-country requirements;

  • double-counting risk; and

  • any contractual restrictions.

Pre-empt requests for additional information and maintain records for credibility, risk management and oversight

Second: preserve an evidentiary trail.

Companies should retain:

  • tender documents;

  • addenda;

  • portal submission records;

  • confirmation receipts;

  • due-diligence correspondence;

  • requests for additional information;

  • responses;

  • minutes of meetings; and

  • all subsequent communications.

First: build a compliance matrix

Every bidder should create a matrix identifying:

  1. the mandatory requirement;

  2. the evidence required;

  3. where the evidence appears in the bid;

  4. whether the requirement is pass/fail or scored;

  5. whether it can be clarified;

  6. whether it may be verified during due diligence; and

  7. the legal consequence of non-compliance.

This should be completed before submission.