Latin America and the future for geothermal in the region
A recent article describes a rather upbeat market for geothermal development in Latin America with multi-lateral support for development, e.g. through risk mitigation funds etc.
A recent article in the Latin America Advisor a publication of The Dialogue today, looks into the future for geothermal energy in Latin America.
With news on Chile’s first geothermal project going ahead and Bolivia being hopeful to be able to export geothermal power from its first geothermal plant at Laguna Colorado, there seems to be somewhat of an awakening of the geothermal sector in the region.
Over the past few months we have reported on an increased development drive, among others in Guateamal, El Salvador, Nicaragua, Chile and other countries. The article tries to answer the question on what the future brings for geothermal and if investors are ready to invest.
Mario Arana, director of Central American Investments SA (INVERCASA) describes the growth in interest for renewable energy and in particularly geothermal energy. He mentions the financial support provided by Germany, “in coordination with the European Union and multilateral, regional and European development banks, has been forming a risk fund of $75 million with financing commitments of $1 billion for geothermal development and with special interest in Latin America. The Inter-American Development Bank recently provided financing for $85 million to Mexico to manage different risk reduction options and incentivize private investment. The World Bank is leading the formation of a risk fund in Nicaragua as well, contributing $15 million of seed money to promote exploration.”
He describes the need for some risk mitigation with involvement of the public sector.
In the article, Juan José García, coordinator for the Regional Geothermal Training Program at the National Energy Council of El Salvador is quite upbeat about geothermal energy development in the region, saying that “from Mexico to Chile, all Latin American countries are deploying legal frameworks, policies and national strategies to overcome this reality. Our political leaders are aware of the importance of geothermal resources, not only to mitigate the effects of climate change but also to strengthen our social and economic models to enhance public welfare. Therefore, the development of these renewable resources has gained a privileged position in national agendas. ”
Among other initiatives the Geothermal Development Facility for Latin America, an initiative launched in Lima in 2014, which has aligned important stakeholders like JICA, IDB, NDF, KFW, GIZ, BCIE, and is a fund consisting of more than $67 million in the form of risk management instruments and over $785 million in credit lines, that will be used to fund the preparation and construction of geothermal power plants in ten Latin American countries.
With the availability of so much support, it is just a question until more projects are pushing forward in the region.
For the full article see link below.
Source: Latin America Advisor/ Energy Advisor of The Dialogue