AFD support to
geothermal development
Kampala, Uganda
September 20, 2011
Maitane Concellon
Programme Officer Energy & Climate
AFD Nairobi
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The AFD Group
 A public Development Financial Institution (DFI), operating in nearly
70 countries
 4 complementary entities
 AFD (Development Financial Institution)
 PROPARCO (dedicated to private sector)
 FFEM (French Global Environment Fund)
 CEFEB (Training Institute)
 7 Billion € committed in 2010 (half in Africa)
 Diversified tools: concessionnal loans/near market condition loans;
sovereign/non sovereign loans; loans to the private sector; guarantees;
technical assistance and grants
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AFD Energy Strategy
Sustainable Energy
Efficient, (C) lean, Renawable
Energy Security
Energy Access
Generation, Interconnections,
Regulation, PPP
Grid, Off-grid,
Biofuels
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Main lines of intervention in EAC
 Development of renewable energy
 Bujagali in Uganda: 250 MW Hydro Power on Nile river (Commissioning April 2012)
 Olkaria I & IV: 280 MW of geothermal power generation in Kenya
 Support to the development of geothermal energy in Ethiopia
 Interest in financing the Ruzizi III hydropower plant
 Access to energy in rural and suburban areas
 Rural and urban electrification projects in Kenya
 Connection Revolving Fund in Kenya allowing connection of low-income households
 Promoting energy efficiency and demand-side management
 Distribution of energy-saving bulbs to low-end residential customers in Kenya
 Renewable Energy and Energy Efficiency credit line for private sector investment in
Kenya, Tanzania and Uganda
 Strengthening infrastructure and regional integration
 Mombasa – Nairobi 400 kV transmission line
 Nairobi Power Transmission Ring
 Regional interconnection: Ethiopia – Kenya 500 kV DC line
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AFD’s support to geothermal in EAC
 Financing of geothermal generation facilities
 Contribution to a 35 MW extension of Olkaria II by KenGen (AFD)
 Construction of a 280 MW power generation plant in Olkaria I & IV by KenGen (AFD)
 Financing of a 48 MW extension at Olkaria III generation plant by Orpower (Proparco)
 Financing for geothermal exploration and drilling
 Support to exploration through the financing of 2 drilling rigs for the GDC (AFD)
 Contribution to the development of 400 MW at Menengai (AFD, under appraisal)
 Capacity Building and Technical Assistance
 Update of GDC’s Strategic Plan and Business Plan (AFD)
 Development of GDC’s health and safety procedures (AFD)
 Considering financing of a regional training center in Kenya dedicated to geothermal
energy for mutualisation of equipment, expertise and knowledge (AFD, under appraisal)
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Diverse financing mechanisms
AFD Group commitments in EAC
Direct nonsovereign
loan to public
utilies
(AFD)
Lending to
IPPs
(Proparco)
Total: 241 million EUR
15 m €
20 m €
Sovereign
loan to
Government
(AFD)
206 m €
 Focusing mostly in Kenya for the moment but also intending to support the development of geothermal
in Ethiopia and Rwanda
 Willing to share experiences and explore opportunities for support with other countries in the region
(Uganda, Tanzania, etc)
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A case study: Olkaria I&IV
 Objective: development of 280 MW power generation plant
with KenGen
 AFD financing: € 150 M - co-financing with WB, EIB, KfW,
JICA (total cost of the project € 982 M)
 Scope of financing: drilling, steam gathering network, power
plant, transmission network
 Key requirements:
 Field modeling (resource optimization/reservoir simulation studies)
 Feasibility study for the power plant and the steam gathering
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network
Environmental Impact Assessment study
Power Purchase Agreement
Geothermal Advisory Committee
Investment and Financing Plan
Economic & financial analysis of the project
Implementation Schedule
Project Steering Committee and Project Implementation Unit
EIA license
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A case study: Menengai
 Objective: 400 MW wellfield development with GDC
 AFD financing: € 52 M for the purchase of 2 rigs and € 70 M
contribution for drilling materials/consultancy and steam
gathering network
 Co-financing with ADB and WB - Total project cost approx. €
600 M
 Scope of financing: production drilling, steam gathering
network and feasibility study for the power plant
 Key requirements:
 Surface exploration, exploration and appraisal wells completed
 Feasibility study for the steam gathering network
 Environmental Impact Assessment study
 Geothermal Advisory Committee
 Investment and Financing Plan
 Economic & financial analysis of the project
 Implementation Schedule
 Project Steering Committee and Project Implementation Unit
 EIA license
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Mobilising ressources for geothermal
development in Africa
 Strong interest in supporting geothermal development in Africa – from smallscale to large scale interventions possible
 Need to ensure strong Government commitment, sound national energy policies,
sustainability of the sector (tariffs, financials of public utilities…)
 Inclusion of geothermal in national least-cost energy development plans
 Resources are limited, needs are huge – need to diversify financing and optimize
complementarity between investors/donors to leverage existing resources
 Grants from donors for early stages to demonstrate potential (site identification, resource
exploration), feasibility studies, capacity building
 Development banks for infrastructure investment (wellfield development /power plant) requires strong Gov commitment and sound public finance/debt sustainability situation
 Private sector for wellfield development and power plant construction
 strong risk mitigation policies/cost sharing required for resources assessment and well
field development
 strong sovereign guarantees/investment promotion policies required even at later
stages of the value chain (well development and power plant development)
 not a costless option for Governments either
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ASANTE SANA
THANK YOU
MERCI
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