Project ID: 31023

China Eximbank provides RMB 592.4 million government concessional loan for Olkaria IV Geothermal Production Wells Drilling Project (Linked to Project ID#58350)

Commitment amount

$ 121892574.47775999

Adjusted commitment amount

$ 121892574.48

Constant 2021 USD


Funding agency [Type]

Export-Import Bank of China (China Eximbank) [State-owned Policy Bank]




Energy (Code: 230)

Flow type


Level of public liability

Central government debt

Financial distress






Development (The next section lists the possible statuses.)





Financial Flow Classification

ODA-like (The next section lists the possible statuses.)

Official Development Assistance

Other Official Flows

Vague (Official Finance)

Flows categorized based on OECD-DAC guidelines

Project lifecycle


Completion (The next section lists the possible statuses.)










Actual start


Actual complete



On November 16, 2009, the Chinese Government and the Government of Kenya signed a preferential loan framework agreement for the Olkaria Geothermal Field Project. Then, on April 13, 2010, China Eximbank and the Government of Kenya signed a government concessional loan (GCL) agreement worth RMB 670,000,000 ($93 million) for the for Olkaria IV Geothermal Production Wells Drilling Project. The face value of the loan was subsequently revised to RMB 592,436,205.64. The loan carried the following borrowing terms: a 2% interest rate, a 20-year maturity, and a 6-month grace period. The loan was scheduled for semi-annual repayment installments from August 31, 2010 until March 21, 2030. The Government of Kenya subsequently signed a subsidiary loan agreement with Kenya Electricity Generating Company (KenGen) -- the largest power producing company in Kenya (responsible for about 69% of the electricity consumed in the country). The proceeds of the loan were to be used by the ultimate borrower (KenGen) to finance its commercial contract with Great Wall Drilling Company (中国石油长城钻探工程有限公司), which was signed in December 2006. The borrower made principal repayments worth RMB 23,697,448 between July 1, 2020 and June 30, 2021 (Fiscal Year 2020-2021) and RMB 47,394,896.00 between July 1, 2021 and June 30, 2022 (Fiscal Year 2021-2022). The loan’s amount outstanding was RMB 473,948,964.52 as of June 30, 2020, RMB 426,554,068.06 as of June 30, 2021, and RMB 379,159,171.61 as of June 30, 2022. The purpose of the project was to drill 26 steam production wells at the Olkaria IV geothermal field, and thereby support the development of a 140 MW geothermal power plant (station). The Olkaria IV geothermal field is located Naivasha District and Nakuru County. It is situated just inside the Hell’s Gate National Park, on the eastern edge of the Eastern Rift Valley. The project was implemented by Kenya's Geothermal Development Company (GDC) — a government special purpose vehicle (SPV) for geothermal development — in collaboration with Great Wall Drilling Company, Kenya Electricity Generating Company Ltd (KenGen), and Kenya's Ministry of Energy & Petroleum. Project implementation commenced on July 23, 2012. It was completed on October 17, 2014. However, there are indications that the project has financially underperformed vis-a-vis the original expectations of the lender. According to a report from Kenya’s Auditor General for the Year Ended June 30, 2021, '[t]he wells were drilled between the year 2011 and 2015 and have never been connected to any plant for generation of power. [Kenya Electricity Generating Company PLC, which is also known as KenGen] has in the meantime continued to pay the principal sum and interest [of the loan] while no corresponding revenue has been realized to date. Further, [KenGen] Management has not given the details of when the wells will likely be utilized in the generation of power. As a result, there is no value for money obtained on the investment [...].'

Additional details

1. This project is also known as Olkaria IV--140MW Geothermal Field Production Drilling Project. The Chinese project title is Olkaria IV地热能项目 or 肯尼亚奥卡瑞四号地热钻井项目. 2. A report from Kenya’s Auditor General for the Year Ended June 30, 2021 suggests that total disbursements under the China Eximbank loan amounted to 79,324,783,562 Kenyan shillings. However, this may be reference to total disbursements under two China Eximbank loans that supported the Olkaria Geothermal Project (captured via Project ID#58350 and Project ID#31023). This issue warrants further investigation. 3. The KenGen Olkaria Geothermal Development Manager told the U.S. Embassy 'that while he would prefer to buy quality American drills, pipes, and other geothermal-related products, American companies could not compete with China on price and price won every time in Kenya.' 4. The commercial contract is also known as the 26-Wells Drilling Services Contract. 5. Sinopec International Petroleum Service Corporation (SINOPEC) was the contractor selected to construct KenGen’s Olkaria IV power plant. A groundbreaking ceremony for one of the two power generation units that supports the Olkaria IV power plant took place in December 2018. 6. Great Wall Drilling Company is a subsidiary of China National Petroleum Corporation. 7. The Government of Kenya loan identification number is 2010001_1. 8. The amounts outstanding and repayments data are drawn from the Kenyan Treasury’s External Public Debt Register. See and and and and and and and and 9. China Eximbank provided a $382.5 million preferential buyer’s credit in 2012 for the Olkaria Geothermal Project (captured via Project ID#58350).

Number of official sources


Number of total sources


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Direct receiving agencies [Type]

Government of Kenya [Government Agency]

Indirect receiving agencies [Type]

Kenya Electricity Generation Company (KenGen) [State-owned Company]

Implementing agencies [Type]

Kenyan Ministry of Energy [Government Agency]

Kenya Electricity Generation Company (KenGen) [State-owned Company]

Geothermal Development Company (GDC) [Joint Venture/Special Purpose Vehicle]

CNPC Great Wall Drilling Company (GWDC) [State-owned Company]

Loan Details


20 years

Interest rate


Grace period

1 years

Grant element (OECD Grant-Equiv)


Bilateral loan

Government Concessional Loan

Investment project loan