African Union Commission seeks to extend GRMF program

African Union Commission seeks to extend GRMF program Olkaria III geothermal plant, Kenya (source: emerging africa fund)
Alexander Richter 24 Oct 2012

The African Union Commission is seeking additional funding to extend the innovative Geothermal Risk Mitigation Fund tool introduced to innitially five Eastern African countries to foster investment into and the development of geothermal power projects in the region.

The installation of the innovative risk mechanism of the Geothermal Risk Mitigation Facility (GRMF) provides a great tool to foster growth of the geothermal energy industry in Eastern Africa bringing renewable base-load power to this part of Africa.

The GRMF was installed by the AU Commission, German Ministry for Economic Cooperation and Development (BMZ), the German Development Bank (KfW), and the EU-Africa Infrastructure Trust Fund (Trust Fund) and supports initially five Eastern African country.

The Facility is funded at 50 million Euros ($65 million) of which 20 million Euros ($26 million) from BMZ and 30 million Euros ($39 million) from the Trust Fund, and is now in place and hosted and managed by the AU Commission. Ethiopia, Kenya, Rwanda, Tanzania, and Uganda are the five initial target countries of the project in Eastern Africa.

The risk mitigation tool installed here is to “provide grants to investors who are undertaking studies then drilling to determine feasible sites for geothermal power development. With high exploration risk in geothermal exploration, the GRMF provides an “innovate mechanism to support the initial high costs and reduce the risks associated with surface studies and exploratory drilling”.

GRMF initially supports development in five countries, but more countries may become eligible for funding in a later phase if additional funds become available.

The African Union Commission is seeking other sources of finances and capabilities to support geothermal exploration, development and utilization in other African countries. The eight countries mentioned in this context are: Burundi, Comoros, Djibouti, DR Congo, Eritrea, Malawi, Sudan and Zambia. Other countries, such as Mozambique and Egypt have expressed interest to join this program and have been invited in further discussions.

Source: Global Times