The Facility aims to increase production of clean and reliable energy to supply power grids in Eastern Africa by attracting public and private developers and to mobilise finance for the construction of geothermal power plants. The Facility provides grants to co-finance surface studies and exploration drilling programmes for public and private developers. The support will reduce the high upfront risks related to the development of geothermal resources and thus geothermal power. The projects it supports are located in Eastern Africa in the countries that have signed the Addis Ababa resolution with the African Union Commission on Geothermal Energy.
The Facility will induce positive social and environmental impacts and contribute to sustainable development by providing affordable and reliable power from sustainable sources. It will increase the amount of renewable energy by supporting exploration activities leading to the development of four geothermal power plants with a combined capacity of 300 MW.
The ITF grant will be used for the following:
- financial support for drilling of exploration wells at the most promising geothermal prospects to assist developers secure finance for subsequent exploration or appraisal wells;
- surface studies to determine the optimal location of exploration wells at the most promising geothermal prospects;
- development of regional geothermal database of prospects in the region;
- pre-application training workshops for developers;
- support to AUC for management of the project. The first call for proposal was launched in October 2012;
- first grants from the first application round have been signed during the first semester 2014, resulting in an overall commitment of €16 900 000. These grants will be dedicated to financing two drilling projects in Kenya, one surface study project in Ethiopia and one drilling project in Ethiopia. End 2013, the Ethiopian Government signed the first Head of Terms on a Power Purchase Agreement with a beneficiary of GRMF, Reykjavik Geothermal. This will be the first PPA with a private energy producer thus potentially setting the path for other private power producers.