Wednesday, February 6, 2013

AfDB working to expand geothermal in E. Africa

Apologies for the inadvertent mailing of a plea for money--mistakenly
sent to the list, please disregard.

And now for some real news...

East Africa: AfDB to boost Geothermal development

Geothermal development - Building on its Kenyan experience in the East
African Rift Valley with the Menengai geothermal project, the African
Development Bank (AfDB) says it is working on an ambitious geothermal
development programme for Africa.

Apart from the gigantic projects such as the 400-MW geothermal
development project under implementation in Menengai, Kenya, the AfDB
is also working on a series of small-scale geothermal units, adapted
to the specific context of each country of the East African Rift
Valley having geothermal potential.

In a press statement here Wednesday, received by PANA, the AfDB said
it is currently working with the government of Djibouti on the
development of a 50-MW power plant in the Lac Assal region.

In Ethiopia, the AfDB has played a leading role in defining a
geothermal development roadmap and in Tanzania, the AfDB is leading
the development of the scaling-up renewable energy programme of the
Climate Investment Funds, which will include the financing of a
geothermal development project.

In the Comoros, the AfDB has started the identification process for a
20-MW geothermal plant, matching the needs of the archipelago,
according to the press statement.

Tonia Kandiero, the AfDB Resident Representative in Tanzania, had
said, during the fourth African Rift Geothermal Conference in November
2012 in Nairobi, that �Our ambition is to support the accelerated
development of the large untapped geothermal resource potential in the
Eastern Africa region.

'Geothermal development has been relatively limited in this region in
the past. Only about 217 MW of geothermal energy has been developed so
far, most of it being in Kenya. This is insignificant compared to the
region�s huge potential, estimated at 10,000 MW in Kenya alone.�

According to Youssef Arfaoui, the Chief Renewable Energy Expert, �The
African Development Bank is now pushing the geothermal agenda with
innovative models that help overcome the several risks associated with
geothermal development, among which the most important one is the
exploratory drilling risk, which is related to the probability of
hitting dry wells during the exploration and appraisal drilling phase.
The mitigation of the risks will also make off-taker and consumer
tariffs affordable.�

He said that a new model had emerged to fast-track the development of
geothermal resources in the East African Rift Valley.

This model entails the financing of the early stage and high-risk
activities mainly related to drilling by development finance
institutions such as the African Development Bank using concessional

The financing goes to a special purpose company in charge of
undertaking the drilling activities and hence taking most of the
drilling risk, which in turn paves the way for private investors to
step in and convert the steam into power by channeling high pressure
steam sources deep underground to operate power generation turbines.

�An eloquent illustration of this new model is the Menengai geothermal
development project in Kenya, which the African Development Bank has
recently supported with approximately US$ 150 million highly
concessional financing from its own resources blended with climate
investment funds,� explains Thierno Bah, the AfDB Senior Power Engineer.

The Menengai Project is the first ever project to be approved under
the Scaling-up Renewable Energy Programme for low-income countries of
the Climate Investment Funds.

The Menengai project, once completed, will have tremendous development
impact for the Kenyan people by increasing the energy supply in the
country by an amount equivalent to the current consumption needs of
500,000 Kenyan households, 300,000 small businesses and some 1,000 GWh
for other businesses and industries.

The project will also displace around two million tons of CO� per
annum, thereby significantly contributing to the fight against climate

Building on the success met in Kenya with the Menengai project, the
AfDB is focusing on developing the geothermal potential in Tanzania,
as Tanzania has been identified as the next country having an
important geothermal potential, with the appropriate institutional
framework and being ready with concrete geothermal sites already

It will use and try to replicate as much as possible in Tanzania the
model developed in Kenya: financing by development finance
institutions using concessional financing for the early stage and high-
risk activities mainly related to drilling activities to be undertaken
by a special purpose company like the Kenyan Geothermal Development
Company (GDC).

The 2012 African Rift Geothermal Conference, which is the most
important African geothermal conference, held in November 2012 in
Nairobi, attended by more than 630 delegates and 25 exhibitors,
enabled the AfDB to flaunt its strong involvement in geothermal energy

It also helped spread awareness of AfDB�s role as Africa�s premier
development finance institution in the geothermal energy sector in
East Africa.

Pana 06/02/2013

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