Lake Assal exploration project launched with AfDB funding of $7.5 million
The Lake Assal project in Djibouti has been launched with funding of the African Development Bank of $7.5 million for the initial exploration work this week.
This week, the “African Development Bank (AfDB) and the Government of Djibouti signed the funding agreements, totalling US $7.5 million, for a geothermal exploration project in the region of Lake Assal.
“The exploitation of geothermal potential in the Lake Assal region will enable the Djiboutian population to access reliable, renewable and affordable source of energy,” said AfDB’s Regional Integration Director Alex Rugamba, on behalf of Gilbert Mbesherubusa, Vice-President, Infrastructure, Private Sector and Regional Integration, during the signing ceremony.
The financing scheme includes a grant and a loan from AfDB’s soft loan arm, the African Development Fund to the tune of US $5.3 million and US $0.4 million respectively. It also includes a grant of US $1.8 million from the Sustainable Energy Fund for Africa (SEFA).
The contribution from the AfDB and SEFA will be used to continue to raise more financing and will serve as a catalyst to rally independent geothermal electricity producers.
Speaking at the signing ceremony, Ali Yacoub Mahamoud, Djibouti’s Minister of Energy in charge of Natural Resources, commended the African Development Bank for “breathing new life into this 20-year old project”.
With this first phase of the project, the government of Djibouti is taking the lead on the first exploration and appraisal drilling phase. The private sector will be responsible, in a second phase, for the production drilling, steam gathering system and electricity production and evacuation to the national grid.“