Deadline: 15-Jul-20
The Geothermal Risk Mitigation Facility (GRMF) was established to fund, facilitate, and accelerate geothermal development in eleven partner countries in the Eastern African Rift region. It is hosted and managed by the African Union Commission (AUC). Funding is provided by the German Federal Ministry for Economic Cooperation and Development (BMZ) together with the EU-Africa Infrastructure Trust Fund (EU Africa ITF) via KfW Development Bank (KfW), and the UK Department for International Development (DFID).
The overall objective of the GRMF is to encourage public and private sector investment into geothermal power generation. This is achieved by providing financial support to mitigate the early stage exploration risk associated with geothermal power projects in order to improve project bankability and secure external financing. The GRMF therefore acts as a catalyst in establishing geothermal energy as a strategic option for power generation capacity expansion in the partner countries.
The objective of the Facility is to encourage public and private investors as well as public private partnerships to develop geothermal prospects for power generation in Eastern Africa by providing grants for two types of activity:
- Surface studies to determine the optimal location of reservoir confirmation wells at the most promising geothermal prospects.
- Drilling and testing of reservoir confirmation wells at the most promising geothermal prospects to assist Developers secure financing for subsequent reservoir confirmation and/or well field development wells.
Herewith GRMF will provide financial support to assist in mitigating the geothermal exploration risk. It is thus expected to improve access to equity or other funding source and thus play a catalytic role in establishing geothermal energy as a strategic option in power expansion planning of the participating countries of Eastern Africa. As a result, reduced risks and costs for early stage geothermal development are expected to encourage the development of further geothermal investments.
Eligible Activities
Eligible activities for the Facility comprise the following:
- Surface studies to determine the optimal location for reservoir confirmation wells at geothermal prospects that have previously been identified. Surface studies can include geophysical surveys (e.g. seismic, gravity, magnetic or magnetotelluric surveys) including supplementary geological, hydrogeological and/or geochemical surveys if necessary for siting reservoir confirmation wells. In addition a surface study programme may include infrastructure required for conducting surface studies (e.g. access roads). Surface studies shall include an integrated resource report interpreting and summarising the results of the surface studies in terms of a conceptual model of the resource and identifying high priority drill sites.
- Drilling projects at geothermal prospects once the optimal locations for the drilling and testing of reservoir confirmation wells have been determined. An exploration drilling programme for funding by the Facility may comprise up to two full size reservoir confirmation wells (≥ 5” diameter of the last casing or liner) or up to three slim hole wells (< 5” diameter of last casing or liner) or a combination of two slim holes and one full size reservoir confirmation well. In addition, a drilling programme may include: infrastructure required for exploration drilling (e.g. access roads, water supply, if applicable: grid-connected power supply); mobilisation and demobilisation of drilling rigs; and well-testing. Furthermore, a drilling programme may incorporate a feasibility study that has the explicit aim of securing finance for subsequent reservoir confirmation wells. As such, it is expected that a feasibility study would combine exploration drilling results and reservoir engineering together with market, regulatory and technical considerations.
- Continuation Premium (complementary to the initial grant funding). Eligible activities for the CP – to be undertaken for the same site as the initial drilling and testing programme, comprise the following: Additional full size well, well-head unit(s) installation, long term discharge testing (minimum six months), reservoir evaluation update, feasibility study (after the successful well drilling and testing, there is a new informational base, which can lead to an updated, bankable documentation of the project to support acquiring further financing).
For more information, visit https://grmf-eastafrica.org/