Sh 10billion has been approved by the European Investment Bank for private sector lead geothermal power projects in East Africa.
As part of a wider funding package of Sh 525bn to accelerate renewable energy investment, support COVID-19 economic resilience by backing private sector investment, improve sustainable transport and upgrade schools and social housing, EIB approved a special package on renewable energy.
“The projects approved today highlight the EIB’s engagement across Europe and around the world to unlock private and public investment that addresses local priorities and global challenges. Tomorrow I will update the EIB’s Governors, EU finance and economy ministers, on the EU Bank’s rapid response to challenges caused by the COVID-19 pandemic and our strong and growing support for green transition and climate action across the world”, said Werner Hoyer, President of the European Investment Bank.
The EIB approved new support for large scale solar power generation across Spain, small scale renewable energy projects in Germany, support investment in clean energy and energy efficiency by companies in Austria, and geothermal power in East Africa.
For East Africa the funding were approved for the East Africa Rift Geothermal Project. The operation is an envelope for financing individual private sector investments into geothermal power generation projects in different countries in the East African Rift region. Sub-operations under the envelope will undergo individual project appraisals and be separately approved for Bank financing.
Funding is available for the countries of: Burundi, Comoros, Djibouti, Eritrea, Ethiopia, Kenya, Madagascar, Malawi, Mauritius, Mayotte, Mozambique, Reunion, Rwanda, Seychelles, Somalia, South Sudan, Tanzania, and Uganda. The proposed envelope will allow the EIB to provide financing to several projects implemented by promoters active in the geothermal power sector in the region (individual private sector investments into geothermal power generation).
Eligible projects will typically include greenfield development and brownfield expansions, with proven geothermal resources. Investments in geothermal energy will help diversify base load renewable electricity supply in the region and contribute to the reduction in greenhouse gas (GHG) emissions compared to fossil-fuel based alternatives, thereby supporting the sustainable economic development of the East African Rift countries.
While the proposed EIB finance is EUR 80 million, the total cost is estimated at Sh 64billion.The overall environmental impact and the residual environmental risks of the operation are unknown at this stage and will be assessed at the appraisal of individual projects.
Potential adverse impacts for these types of projects include involuntary resettlement, impacts on indigenous peoples, community health, safety and security due to construction activities, working conditions, including worker camps, archaeology and cultural heritage sites, landscape and biodiversity.