POWER-III

closed

The primary objectives of the Olkaria Geothermal Power Project are to provide a firm source of power and to assist in reducing dependence on imported oil. The project consists of the drilling of geothermal steam wells, the construction of a generating station comprising two 15 MW units, and the installation of 22 km of 132 kV transmission lines. Financing for consulting engineering, training and studies of further geothermal potential and the next power project is included. The implementation and financial risks are moderate. The technical risks appear to be normal for such underground work, since seven of the twelve wells already drilled have been producing steam for an extended period. The engineering loan will finance: (i) drilling equipment and supplies to drill production wells for the recovery of steam at Olkaria sufficient to power an electric generator with the capacity of 15 MW, to be followed by further drilling for a second unit of 15 MW; (ii) the cost of consultants for the preparation of specifications for the drilling equipment and for the supervision of the drilling program; (iii) the cost of expatriate drill operators; and (iv) the training of local personnel. The purpose of the drilling will be to provide adequate quantities of steam at appropriate temperatures and pressures for the Power III Project. The training element will help KPC develop indigenous geothermal drilling experience so that they may be capable of executing a continuous drilling program. The risks appear to be normal for such underground work, since five of the seven wells already drilled have been producing steam.