Geothermal in East Africa: Potential, challenges and developments

Transcription

1 Geothermal in East Africa: Potential, challenges and developments Martin Schubert, KfW Afrikaverein, Hamburg, April 14th 2014

2 Audience in the workshop 1) Who is from the financial and insurance industry? 2) Who is from an African country involved in geothermal energy? 3) Who is from a geothermal developper, exporter or consultant? 4) Who is generally interested in geothermal development? 2

3 Overview of Geothermal Energy High Potential, but low usage in the East African Rift Valley Source: BGR 2013 Source: BGR

4 Overview of Geothermal Energy Key features of geothermal energy Geothermal Energy is... a renewable sourceof energy: the use of hot steam or waterunder high pressure mostly located close to boundaries of tectonic plates Environmentally friendly due to its fossil-fuel fuel-free free nature A stable source of base-load power competitivein terms of cost per kilowatt hour alongterm project with high upfront costs Source: ESMAP

5 Geothermal: Risks and cost Risk Cost Public support(e.g. DFIs), financing, DFIs (private) equity, DFIs (private) equity, commercial 5

6 Geothermal development: Other investment barriers 1) Regulatory and legal framework e.g. exploration and production licences, adequate 2) Power Purchase Agreements for geothermal 3) Capacity within the domestic institutions responsible for geothermal development 4) And Doing Business 6

7 KfW Development Bank: Energy sector in figures 2013 worldwide: EUR 1,6 billion new commitments in the energy sector Renewable energy worldwide in 2013: EUR 683 million (> 40%) new commitments Sub Saharan Africa in 2013 in energy sector: EUR 365 million (23% of KfW s energy commitments) Geothermal: Power plants Olkaria, exploration Bogoria Silali, Geothermal Risk Mitigation Facility in East Africa (total > EUR 100 million) 7

8 KfW Development Bank: Geothermal Risk Mitigation Facility EUR 20 m GRMF EU- ITF EUR 30 m Objective Encouraging public & private investors to mobilize & provide funds for development of geothermal power plants in East Africa Pilot Countries: Ethiopia, Kenya, Rwanda, Tanzania, Uganda Additional countries second round: Burundi, Comoros, Djibouti, DRC, Eritrea & Zambia Drilling Projects Surface Studies Database Support Funding: - 40% of exploration drilling costs - 20% of infrastructure costs related to drilling project - 30% of developers exploration drilling costs as continuation premium in exceptional cases Funding: - 80% of surface study costs - 20% of infrastructure costs Providing developers with specific research and exploration data 8

9 Concept of the Geothermal Risk Mitigation Facility Key features Strong African ownership - AUC leadership - Country representation Transparent application and assessment procedure - Oversight Committee (Members: 3 AUC, 1 target country, 1KfW) - Comprehensive procurement and application guidelines High quality project pipeline - Support of the best projects in a cross-border competitive process - Public and private developers are competing for the same funds - Thorough selection through experts - Continuation premium to incentivise execution of projects 9

10 GRMF: First results 1st application round 2012: 11 expressions of interest from 4 countries resulting in: Project Project Location Company Grant Status awarded USD million 4,3 signed Bogoria-Silali GDC - Public Longonot Kenya Agil- Private 6,1 signed Suswa WalAm - Private 5,8 pending Reykjavik Corbetti Geothermal- 5,6 Ethiopia Private signing in April Dofan GSE - Public 1,0 signed Total Grant Awarded by GRMF 22,8 2nd application round 2013: 14 expressions of interest from 7 countries Full application by August 2014, signing by October rd application round 2014: Deadline for submission of expression of interest: mid-october

11 Thank You for Your Attention!