Geothermal Risk Mitigation Fund being established for Latin America
A consortium lead by German Rödl & Partner has been contracted to prepare a risk mitigation fund for geothermal development in Bolivia, Chile, Colombia, Ecuador and Peru. The fund will be established by the Central American Development Bank (CAF) and the German development bank KfW.
Announced today by German Rödl & Partner, the development bank of Latin America (CAF) and German development Bank KfW, with financing from European Commission have commissioned a consortium under the management of Ro?dl & Partner in cooperation with the Geothermie Neubrandenburg (GTN) in Germany and Chile, Mannvit (Island) and the legal firm Bofill Mir & Alvarez Jana (BMAJ, Chile) with the elaboration of a concept for a multi-million development fund for deep geothermal projects in South America.
In expert circles deep geothermal technology is seen as the hidden champion of renewable energy alternatives. The load capability, the high energy output and the resulting potential to reduce CO2 together with the possibility of direct utilisation of thermal and cooling energy makes it one of the most interesting types of renewable energy. The high investment costs and risks associated with the exploration phase, however, represent a considerable barrier.
Latin America has been slow to exploit the potential of geothermal energy. For this reason the KfW Development Bank together with CAF has initiated the development of the Geothermal Development Facility Latin America (GDF) as a market incentive program for the energy markets of Bolivia, Chile, Colombia, Ecuador and Peru. The GDF will include among else a grant based risk mitigation fund in order to facilitate early stage development and therefore mitigate the largest barrier to the development of the technology. Thereby GDF seeks to facilitate the development of geothermal energy on a large scale in the region.
Ro?dl & Partner was commissioned by CAF to manage the consortium to draw up a concept for this risk mitigation fund. “We welcome the commitment of CAF to support the development of geothermal energy in these markets using a defined model and are confident that the fund will significantly help to expand this sector”, explains project manager Kai Imolauer from Ro?dl & Partner in Nuremberg. “The results of this study will create the basis to secure the financing of the development fund in order to selectively channel appropriate incentives to the markets.”
Source: Rödl & Partner release by email