UN to Insure Geothermal Explorers in East AfricaPublished by MAC on 2007-03-23
UN to Insure Geothermal Explorers in East Africa
23rd March 2007
NAIROBI - The United Nations and World Bank have launched a fund to help insure energy explorers hunting geothermal power sources under Africa's volcanic Great Rift Valley, officials said on Thursday.
The Rift has the potential to produce more than 400 megawatts of geothermal electricity, UN experts say, or more than half east Africa's total power generation capacity, including all its power stations and hydropower dams.
But exploration is very costly, so the African Rift Geothermal (ARGeo) fund aims to encourage investors by paying for part of the bill at sites where test drilling -- which can cost several millions dollars at a time -- comes up "dry".
"The expense of looking for geothermal is huge," Catherine Vallee, a senior UN Environment Programme (UNEP) programme officer, said in an interview. "This new facility will provide a kind of insurance scheme to mitigate against some of that risk".
Geothermal plants use steam trapped deep underground to spin turbines, creating power. The technology has attracted growing interest as rich and poor nations alike try to boost generation while reducing gases emissions blamed for climate change.
The World Bank has committed $13 million so far to the ARGeo fund, which will operate in six countries along the Rift: Kenya, Uganda, Tanzania, Ethiopia, Eritrea and Djibouti.
UNEP has contributed $4.7 million, and bilateral donors are expected to add at least another $10 million to the pot.
Kenya was the first African country to tap geothermal power, and already hosts the continent's biggest geothermal plant near Naivasha, about 140 km (85 miles) west of the capital. The ARGeo project will seek to build on that by boosting local skills and sharing experience and exploration equipment.
"Geothermal is secure, reliable and clean energy, once set up," Vallee said. "It can really change things in this region."
Katherine Sierra, the World Bank's vice president for sustainable development, said the Bank had donated some $200 million to building geothermal capacity in Kenya over the last 30 years -- about a third of its total donations to the country.
"Africa's strategy should be to look to their own resources to reduce oil imports," Sierra told Reuters at a sustainable development conference in Nairobi. "Geothermal also has the benefit that it reduces local pollution and improves health."
Story by Daniel Wallis
REUTERS NEWS SERVICE