APRIL 2014 – WASHINGTON, D.C. – Funded by the United States Agency for International Development (USAID), two senior level officials from the Kenyan National Treasury and the Ethiopian Ministry of Water, Irrigation and Energy recently participated in the US-East Africa Geothermal Partnership (EAGP) program’s Geothermal Policy and Finance Exchange in Washington, DC.  During the exchange, the delegates participated at the International Geothermal Showcase and met with US Government Agencies engaged in Power Africa, such as the Overseas Private Investment Corporation (OPIC), US Export Import Bank (ExIm) and US Trade and Development Agency (USTDA), as well as with US private geothermal companies and the World Bank. The delegates also attended a “Geothermal Best Practices for Risk Reduction Workshop” organized by the Geothermal Energy Association (GEA) and the U.S. Department of State and a USEA briefing on implementing clean energy programs. 

ABOUT THE US-EAST AFRICA GEOTHERMAL PARTNERSHIP

The U.S.-East Africa Geothermal Partnership (EAGP) was established in September 2012 to promote the development of geothermal energy resources and projects in East Africa. It also encourages and facilitates the involvement of the U.S. geothermal industry in the region. The EAGP program is a partnership between the U.S. Agency for International Development (USAID) and the Geothermal Energy Association (GEA), and is implemented by the U.S. Energy Association (USEA).  EAGP initially focuses on five priority countries: Ethiopia, Kenya, Rwanda, Tanzania, and Uganda.

Through the EAGP program, the United States Energy Association (USEA) is providing technical and transaction advisory support and capacity building to public organizations and government ministries involved in geothermal development in the region through executive exchanges, workshops and short-term technical assistance assignments to learn about geothermal best practices from their counterparts in the U.S. and third countries.

DELEGATE PARTICIPATION IN THE INTERNATIONAL GEOTHERMAL SHOWCASE

The delegates for this exchange were Ato Gosaye Mengistie Abayneh, Director of Energy Studies and Development at the Ethiopian Ministry of Water, Irrigation and Energy, and Eng. Stanley Kamau, Director of the Public Private Partnership (PPP) Unit of the Kenyan National Treasury. Mr. Abayneh and Mr. Kamau had speaking roles at the GEA’s International Geothermal Showcase. Both presented on the geothermal sectors in their respective countries to an audience of 250 people from 36 countries as part of the “Showcase of the Latest Geothermal Developments in East Africa” panel.

Mr. Kamau, who also serves as a member of the board of the Geothermal Development Company (GDC) of Kenya, began with an overview of Kenya’s power sector and estimated geothermal resources.  He then presented more specific information about the status of development at different GDC, KenGen and private developer sites and discussed different options available for structuring private-public partnerships with GDC for joint development of geothermal power.  Mr. Kamau’s charts explaining the transaction structure for power and steam purchasing as well as his breakdown of the $0.085 per kWh proposed tariff for the Menengai plants gave critical investor information to the audience and sparked lively side discussions.

Mr. Abayneh presented a brief overview of Ethiopia’s power sector and current capacity, as well as country development plans for new hydropower, wind, solar and geothermal plants.  Ethiopia’s estimated geothermal resource potential is 7,000MW, of which the Ministry plans to see 75MW online by 2015 and 2,500MW by 2030.  Mr. Abayneh discussed the two strategies for development that Ethiopia is testing currently – full private sector development, exemplified by Reykjavik Geothermal’s IPP project in the Corbetti area; and fully public development with various donor support at Aluto Langano, Tendaho and Alalobad fields.

The East Africa panel also included Dr. Horst Kreuter, from Geothermal Power Tanzania (GPT), and Mike Long, from POWER Engineers.  Dr. Kreuter spoke about the resource characteristics at fields in Tanzania, such as Ngozi and Mbaka. He also stressed the need for East African utilities and Ministry level officials to recognize that tariffs, plant capacities and development timelines must be reflective of the resource type and quality available at a given field.  Mike Long discussed different models of public-private development of geothermal resources that are being tested by GDC and KenGen. He also covered some of the potential benefits of staged asset deployment to generate early returns on earlier stage geothermal development. This includes well-head generation with modular plants, as is being explored by KenGen.

 DELEGATE MEETINGS WITH AGENCIES AND PRIVATE INDUSTRY

In addition to participation in the Showcase event and the Geothermal Risk Reduction Workshop EAGP arranged meetings for the two delegates with the following agencies and organizations throughout the week:

• Geothermal Energy Association
• The World Bank
• Overseas Private Investment Corporation (OPIC)
• Export-Import Bank
• USAID
• Energy Information Administration
• Electric Power Research Institute
• U.S. Department of State
• U.S. Trade and Development Agency (USTDA)
• U.S. Trade Representative
• U.S. Department of Energy

EAGP also facilitated introductions between the delegates and a number of U.S. geothermal companies and organized one-on-one meetings with private sector companies and other organizations in the geothermal sector.  Through these meetings, the delegates were able to discuss project opportunities open to the private sector and available structures, such as PPPs, for engaging private sector partners, and ultimately build or strengthen relationships with US industry representatives.  In addition, a few companies that are currently active in East Africa or that have been working to enter the market were able to ask the delegates more candid questions about issues they have been facing with respect to business environments and procurement processes or other factors.

 POWER AFRICA MEETING WITH INDUSTRY STAKEHOLDERS

Alongside the Geothermal Policy and Finance Exchange Program, EAGP facilitated a meeting for geothermal industry representatives with Power Africa’s Amanda Lonsdale to discuss key elements for a successful enabling framework for geothermal development.  Ms. Lonsdale is currently working with Power Africa and donors in the region on the “Geothermal Strategy for East Africa” – a model framework for developing geothermal resources in countries such as Kenya, Ethiopia, Djibouti, Tanzania, Rwanda and Uganda.  Power Africa places a high priority on working with private sector stakeholders to better shape transaction-focused programs in Africa. During the meeting, Amanda shared her current work with Power Africa, and asked for perspective and input from geothermal developers and service-providers on key areas to improve the policy, regulatory and financial environment for geothermal development in East Africa.

The meeting was well-attended with 21 private sector participants. The group included a number of private developers currently active in East Africa, such as Reyjavik Geothermal (Corbetti project in Ethiopia), Marine Power (Akiira Ranch in Kenya), Geothermal Power Tanzania (Mbeya and Ngozi fields in Tanzania), and Sosian Energy (prospective developer at Menengai in Kenya).  

GEOTHERMAL POLICY & FINANCE EXCHANGE PROGRAM PARTICIPANTS

1. Eng. Stanley K. Kamau, Director of the Private Public Partnerships Unit, National Treasury of Kenya and Board Member of the Geothermal Development Company (GDC)of Kenya
2. Ato Gosaye Mengistie Abayneh, Director of Energy Studies and Development, Ethiopian Ministry of Water, Irrigation and Energy

For additional information, please contact Andrew Palmateer at [email protected].