USEA Stakeholder Workshop
Earlier on there was a Stakeholders Workshop to present the results of an assessment for a potential geothermal risk mitigation facility for East Africa (GeoFutures Risk Mitigation Facility) conducted by the United States Energy Association (USEA) for Power Africa.
The Workshop took place on Thursday, March 23, 2017, from 9:00AM to 1:30PM at the Radisson Blu Hotel – Upper Hill in Nairobi, Kenya.
Drawing on best practice from other geothermal support mechanisms, the GeoFutures Facility has been designed to complement existing regional facilities and provide support in a variety of ways. It comprises three flexible pillars that will support the progression of projects from start to finish, and a funding scheme that allows for a high leverage of private capital relative to public capital.
These are: (i) Technical Assistance, (ii) Direct Finance and (iii) Risk Mitigation
The Technical Assistance pillar addresses the need for a more robust enabling and implementing environment by providing technical support in a variety of ways, filling gaps that are not covered by existing programs. To ensure complementarity and avoid overlap with existing facilities, access to this pillar will be contingent on confirmation that existing facilities are not able to support the requested TA. Activities in this area are pre-commercial and therefore rely heavily on public funding.
The Direct Finance pillar supports projects at critical development points in a streamlined manner, increasing the ability for projects to rely on this flow of funds, and in turn increasing the ability to move further private sector investment. It also covers a wider spectrum of activities than existing facilities.
The Risk Mitigation pillar provides access to an innovative private-sector insurance mechanism that targets resource risk, which is one of the key barriers to geothermal investment. The proposed solution principally addresses the risk of lower-than-expected well productivity. Rather than have the public sector assume all the risk, public funds would be used to cover due diligence costs and 60% of the insurance premium payments. This effectively leverages public-sector funds for private-sector involvement in the geothermal industry; engages the domestic insurance market and facilitates local capacity building and knowledge transfer. Opportunities to replicate this mechanism for other risks (e.g., pure drilling risk) also exist within this pillar.
To view a copy of the GeoFutures draft report summary kindly click on the link below