AfDB Explores Africa’s Geothermal Potential
The African Development Bank (AfDB) participated in a Geothermal Seminar held in Reykjavik, Iceland, from 13-16 January 2011, initiated by the U.S chair at the AfDB in coordination with the US Embassy, to share perspectives on the great energy potential that geothermal resources represents in Africa. The seminar sought to build capacity in geothermal project development by providing on-site technical awareness and assistance to AfDB staff and East African Rift Valley (EARV) utility company representatives. In addition to attending presentations on geothermal energy, the group visited the Hellisheidi geothermal plant.
In his opening remarks, Iceland President, Olafur Ragnar Grimson, explained how Africa can benefit from 50 years of Icelandic geothermal development: “We already have technologies and production methods tested and partly developed here in Iceland which are ready to be applied in African countries enabling that beautiful continent to have a clean energy economy, strengthening the foundations for successful development and prosperous future”
The U.S. Geothermal Energy Association estimates that Africa's Rift Valley could present an untapped energy potential ranging from 2,500 to 6,500 MW of electric power. Developing East Africa’s geothermal reserves could significantly increase electricity access rates—which are currently only 1.8% for Burundi, 7% for Rwanda, 10% for Uganda, 15% for Kenya, 30% for Sudan and 50% for Djibouti—for about 280 million people and alleviate the leading constraint to doing business according to the region’s private sector.
Participants came away from the seminar understanding that EARV governments should play a leading role in financing exploration and drilling phases in order to mitigate the high risks involved in surface and drilling exploration and attract private investors on downstream activities in a PPP framework. The AfDB should support this effort by establishing appropriate financing instruments and by facilitating resource sharing among EARV countries.
The seminar gathered representatives from the African Union, the Rift Valley Utilities including utilities from Djibouti, Ethiopia, Kenya, Rwanda and Uganda; members of the U.S government and staff from the AfDB’s private sector (OPSM) and the Energy, Environment and Climate Change (ONEC) departments.
The seminar was sponsored by the US Executive Director’s Office to the AfDB, the US Commercial Service Liaison Office to the AfDB, Ambata Capital Partners, and Reykjavik Geothermal, while the participation of the East African utilities were supported by the AfDB and the World Bank’s Public-Private Infrastructure Advisory Facility.