Iceland joins extensive $500 million World Bank geothermal development program
Iceland announces participation in extensive $500 million Global Geothermal Development Plan by the World Bank, that will provide finance for feasibility assessment and test drilling for geothermal projects.
In a press conference this morning, Iceland’s Minister for Foreign Affairs, Össur Skarphéðinsson, presented “the most extensive development project Iceland has participated in. It includes the development of a Global Geothermal Development Plan under the auspices of the World Bank, which could amount to 500 million USD. The facility will provide finance for geothermal feasibility assessments and test drilling. The collaboration between Iceland and the World Bank is the largest initiative so far for promoting the utilisation of geothermal energy in developing countries, and Iceland will effectively become the Bank’s key partner in this field.
On this occasion, an agreement was signed between the Nordic Development Fund (NDF) and Iceland on the co-financing of the first phase of the project. The Icelandic government and the Fund will contribute 5 million EUR each to the project during a five year period.
The Nordic Development Fund has thereby teamed up with Iceland and the World Bank with a contribution towards primary exploration and research. The Icelandic International Development Agency, ICEIDA, will be the lead agency for this component. The objective is to advance geothermal utilisation in thirteen states of the Great Rift Valley in East-Africa; Djibouti, Ethiopia, Uganda, Eritrea, Kenya, South-Sudan, Tanzania, Malawi, Mozambique, Burundi, Rwanda, Zambia and Somalia. Energy poverty in the areas is high; however experts consider that the Great Rift Valley has a 14,000 MW of geothermal potential that can provide up to 150 million people access to clean and renewable energy.
Iceland will, with the support of the Nordic Development Fund, assist the respective states with geotechnical investigations of promising sites, detailed geophysical, seismic, environment and chemical tests including test drilling and assessments. The World Bank will, on the other hand, collaborate with Iceland, other partners and funding agencies to establish a flexible financing facility that can in part share the costs and risks of specific drilling programs in the target countries. The drilling is the most costly part of the exploration and the primary hindrance to the utilsation of geothermal energy. However, if the drilling yields positive results, it will be possible to harness geothermal energy for electricity production and utilise it to further economic development, with the active participation of the private sector.
The Minister for Foreign Affairs signed the agreement, along with Pasi Hellman, the new Managing Director of the Nordic Development Fund, and Engilbert Guðmundsson, the Director General of Iceland‘s International Development Agency, Rohit Khanna, the Program Manager of the Energy Sector Management Assistance Program represented the World Bank.”