This archive report was first published on 19 December 2019.
On December 19, 2019, Stanbic Bank Kenya suffered a significant financial loss of Sh1.4 billion due to the collapse of a geothermal drilling deal between a Chinese firm and the State-owned Geothermal Development Company.
The deal, which was signed in 2014, involved the drilling of a well at the Baringo-Silali Geothermal Project. However, the project failed to take off, and the Chinese firm, Hong Kong Offshore Oil Services (HOOSL), did not complete the drilling operations.
According to Johnson ole Nchoe, the Managing Director of GDC, the State agency has successfully recovered $14,629,952 (approximately Sh1.4 billion) from Stanbic Bank Kenya Limited, which had provided an Advance Payment Guarantee for HOOSL in favor of GDC.
"The Geothermal Development Company has successfully recovered $14,629,952 (about Sh1.4 billion) from Stanbic Bank Kenya Limited that had been paid to a Chinese firm for drilling operations at the Baringo-Silali Geothermal Project," Mr. Nchoe said.
With the recovery, GDC plans to proceed with the drilling of the wells, which were envisioned to boost Kenya's geothermal energy mix. One drilling rig is already on site, and two wells have been completed.
