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Powering Africa’s Long Term Economic Growth through Robust Investments in Geothermal Energy Development

Arusha, Tanzania 29 October, 2014 – Vice President of Tanzania, Dr. Mohamed Gharib Bilal calls on Africa and partners to use the potential of Geothermal in the region to catalyze the continent’s economic, social and environmental development aspirations.

He made the call at the opening of the Fifth African geothermal Conference (ARGeo-C5) attended by over 500 regional and international experts, policy makers, developers and financiers as well as institutions from Africa and across the world.

This three day conference hosted by the Government of Tanzania in Arusha, focuses on the theme “Geothermal: Solution to Africa Energy needs”, and is meant to explore solutions on how to mitigate the risks associated with resource exploration; attract private developers to fast track geothermal development; reduce lead times in developing geothermal projects; leverage investment to stimulate the growth of industry; and effectively develop, construct, and operate successful geothermal power plants.

Dr. Bilal said “It indisputable fact that sustainable and affordable energy supply is pivotal to realizing economic and social development. Renewable energies and specifically geothermal present a viable option towards diversification of the generation mix, thus increasing power supply reliability”. He added that “Despite being in the infancy stages of geothermal development, we shall step up all the existing efforts to empowering the geothermal sub sector in order to make sure that it contributes towards improving the overall energy sector so that eventually energy contribution to the country’s economic growth and the prosperity of our people as stipulated in our various development goals are achieved.” 

Hydropower currently provides 95% of the electricity in East Africa. But the capacity is frequently reduced by droughts, resulting in supply shortages and high fuel costs. At the same time, the East Africa Rift System (EARS) has a largely untapped geothermal resource potential suitable for power generation. The results of integrated geo-scientific studies carried out in the East Africa region for the last four decades provide an estimation of geothermal resource potential for power generation of about 20 GWe.

UNEP’s Representative and Regional Director for Africa, Mounkaila Goumandakoye said: “Africa has enormous natural resources and yet in many parts of the region, energy precariousness, high dependence on fossil fuels, weak energy sector, and low investments in clean energy which are impeding development prospects on other sector. Energy is a master key to prosperity and sustainable energy is the only way to connect poverty eradication, equitable economic growth and a healthy environment. The continent therefore needs to shift towards clean, efficient, reliable and renewable sources of energy, and energy efficiency.” He added that “Geothermal energy now emerges as a prodigious opportunity for Africa’s electricity grid as demonstrated by recent projects in a growing number of countries.”

 

Tanzania, like most of the other countries in Africa has been experiencing erratic power supply mainly due to high dependence on hydro sources and fossil fuel thus making power supply system in the region prone to weather and oil price shocks. As part of creating conducive environment and mobilizing resources to fast track geothermal energy development, the government has established the Tanzania Geothermal Development Company Limited (TGDC), as a dedicated public entity to oversee the development and utilization of geothermal energy in the country. The government has also initiated various strategies including addressing policy, legal and regulatory framework, institutional arrangement and capacity building which hinder development and utilization of geothermal resource.

Kenya, with its vast geothermal resource potential estimated at 10, 000 We, has adopted a geothermal-based capacity expansion strategy to supplement hydropower, which despite contributing up to over fifty percent of the total electricity generated is highly vulnerable to the impacts of recurrent drought. In June, Kenya announced that it would install some 1,700 megawatts of geothermal capacity within the next 5 years - 150 percent of the country's total electricity generating capacity.

The country already hosts the largest geothermal power plant in Africa (Olkaria II) and has recently commissioned the construction of two geothermal power plants of 140 MW each at Olkaria IV and the new Olkaria I, and is currently generating a total of 573 MWe. Kenya is stepping up to lead the geothermal development in the region and to be one of the fastest growing geothermal markets in the world. In the context of its Vision 2030 meant to modernize the economy, the extensive use of energy from different sources is critical. The government is therefore investing considerable amount of resources into building up the country’s geothermal infrastructure in order to increase the power generation capacity from 1,100 MWe in 2010 to 15, 000 MWe in 2030, for an estimated investment of USD 45 billion. 

In Ethiopia, Aluto Langano the first’s geothermal pilot power plant is being expanded from 7 to 35, eventually 75 MWe and three more are in the pipeline with about 440 MWe by 2018, with the support from Reykjavik Geothermal Ltd, a private developer from Iceland. In Djibouti and  Eritrea, prospects are very promising. Djibouti plans to supply nearly all of its electricity needs through geothermal energy, with the help of the World Bank and other consortium of donors.

In other countries such as Uganda, Tanzania, Comoros, Zambia, Burundi,, the Democratic Republic of Congo,  which have not conducted test drillings to verify the commercial viability of their resources, successful developments are also foreseen on the basis of positive results from the exploratory activities, coupled with a strong commitment by governments, backed by international support and attractive grants. Yet this source of energy still presents huge challenges as exploratory costs are very high.

The $66 million African Union Commission (AUC) -German Development Bank (KfW) Geothermal Risk Mitigation Facility for East Africa (GRMF)funded by  the European Union-Africa Infrastructure Trust Fund, and the German Ministry for Economic Cooperation, are the main partners which support geothermal studies and infrastructure development in Africa.

Through the ARGeo project, UNEP and the Icelandic International Development Agency (ICEIDA) are closely collaborating to support and promote the development of geothermal resources in the East Africa Region. One particular area of cooperation has been the development of “ARGeo Geothermal Inventory Database-AGID”, a major initiative in which the Government of Iceland, through is providing technical advice and most of the financial provision, which is to be launched during this conference.

This ARGeo-C5 will showcase some of the unfolding success stories, equipment and services in the geothermal development, with the view to encouraging exploration from over parts of the continent. Accordingly, this conference will promote regional cooperation and provide an information exchange platform on exploration, development, investment and utilization of the geothermal resources in the region and elsewhere in the world.

Energy and Mines Ministers from the East African Region and regional directors of investment and development banks are also expected to participate in the Roundtable Ministerial Dialogue of the Conference in order to unlock develop a strategy on accelerating development of geothermal resources in the region.

Note to Editors:

Three Parallel short course training were held on 27-28 October as part of ARGeo-C5, focusing respectively on (a) Optimized Exploration, Data Management, Conceptual Modeling and Well Design and Planning; (b) Financing Geothermal Projects from Exploration Through Constructions, and (c) Drilling Technology Options in Geothermal Resource Exploration and Development.

The UNEP-ARGeo programme, through regional networking and information systems, assists member countries to organize the biennial regional geothermal conferences in coordination with other geothermal support partners, such as the Icelandic International Development Agency (ICEIDA), the Federal Institute for Geosciences and Natural Resources (BGR), the Geothermal Development Company (GDC), the US Power Africa, the Geothermal Training Programme of the United Nations University (UNU-GTP), the African Union Commission (AUC), the United States Agency for International Development (USAID) and the East African Regional Branch (EARB), and  the International Geothermal Association (IGA).

The African Rift Geothermal Development Facility (ARGeo) project implemented by UNEP was launched in 2010 in Djibouti to encourage public and private developers to accelerate the development of geothermal resource in the East African region, and reduce risks associated with the resources exploration, thereby reducing greenhouse gas (GHG). The project is funded by the Global Environment Facility (GEF).

The ARGeo project has so far achieved significant milestones. It has, among others, developed two project pipelines of Silali (Kenya) and Tendaho (Ethiopia), which will be used for future investment and development to be financed through AUC-KfW Geothermal Mitigation Facility and other developers. Two other projects have been earmarked for surface exploration studies in Alid (Eritrea) and Kibiro (Uganda). The project has also created a platform for regional networking and geothermal related information with focal points from 13 East African countries through the African Geothermal Inventory Database (AGID) and websites that attract investments. Furthermore, ARGeo has strengthened institutional and infrastructural capacities through trainings and hands on experience where more than 140  experts were trained in various aspects of geothermal science and technology; Part of this support includes continuous advice and technical support to create appropriate institutions and  momentum for fast-tracking geothermal development in the region, as was the case for the new Tanzanian Geothermal Development Company and Geothermal Resource Department in Uganda. 

The UNEP ARGeo Project has established partnership and synergy with key regional geothermal support programmes that include: (i) AUC Geothermal Risk Mitigation Facility (GRMF) supported by KfW Entwicklungsbank (KfW); (ii) Icelandic International Development Agency (ICEIDA) for the geothermal database, capacity building and surface exploration studies; and (iii) German Federal Institute of Geosciences and Natural resources (BGR) for regional networking and capacity building.

More information on the ARGeo project is available on: http://theargeo.org/

For interviews contact:

Meseret  Zemedkun, Program Manager; Tel. +254 20 762 5634; Meseret.Zemedkun@unep.org

Or

Moses Mbego; Tel. +254 20 762 1392; Moses.Mbego@unep.org

 

For more information, please contact Angele Luh, Regional Information Officer for Africa; Tel: +254-20 762 4292; Angele.Luh@unep.org



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