The GeoFutures Facility | Schlumberger
Tech Paper
Byline
Ann Robertson-Tait, Amber Falconer Thomas, and Raysa Roque-Rivera, Schlumberger; Julian Richardson, Parhelion Underwriting Ltd.; Andrew Palmateer and Scena Nayak, US Energy Association
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The GeoFutures Facility: A Proposed Geothermal Risk Mitigation Instrument for East Africa

Abstract

Drawing on best practices from other geothermal support mechanisms, the proposed GeoFutures Facility has been designed to provide a variety of support mechanisms while complementing existing geothermal risk mitigation facilities that focus on East Africa. The GeoFutures concept builds on the strategies used and lessons learned in implementing other important geothermal risk facilities such as KfW’s Geothermal Risk Mitigation Fund (GRMF) and Geothermal Development Fund (GDF) for Latin America, and others undertaken by development banks and governments. The analyses of these facilities led the authors to conclude that for GeoFutures, the application process should be streamlined and user-friendly, the use of funds should be reasonably flexible, disbursements should be scheduled based on milestones, and an insurance mechanism that partially replenishes the facility should be incorporated.

GeoFutures comprises three flexible pillars that support the progression of projects from start to finish: a technical assistance pillar (100% grant funding) to help create an enabling environment for geothermal development and respond to specific technical needs of projects; a direct finance pillar (40% of eligible costs as either grants or convertible loans) to support focused exploration and well targeting at the prefeasibility stage (as grants), infrastructure development (as convertible loans to be repaid when projects are developed), and initial exploratory drilling (as grants); and a risk mitigation pillar that supports 60% of the costs associated with private-sector well productivity insurance.

To provide support to all three pillars, an initial funding level of approximately $75 million is suggested, including: $8 million for technical assistance; $40 million for direct finance (including $28 million for exploratory drilling); and $27 million for risk mitigation. The last would allow for approximately five projects to be covered at any one time. The funding scheme proposed for GeoFutures allows for a high leverage of private capital relative to public capital, particularly in the risk mitigation pillar. For a relatively small commitment by the public sector to cover insurance premiums, significant risk is transferred to the private sector.

To request abstracts or topics from previous years, please contact geothermexinfo@slb.com.

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