< Back to Events

Second Geothermal Dialogue: Effective Financing of Geothermal Development – What Have We Learned?

Munich, 2015-03-02

2nd Geothermal Dialogue – Agenda(59.1 kb)
2nd Geothermal Dialogue – List of Participants(47.2 kb)
2nd Geothermal Dialogue – Summary(187.1 kb)
Second Geothermal Dialogue: Effective Financing of Geothermal Development – What Have We Learned?

 

A meeting organized by Climate Policy Initiative
in partnership with the Climate Investment Funds, kindly hosted by Munich Re

 

This meeting is the second of a series of Geothermal Dialogues that bring together major actors involved in the financing of geothermal development to enable a global sharing of experiences and to explore emerging lessons in the quest to scale up effective geothermal finance. Building upon the First Geothermal Dialogue, held in Copenhagen on October 24th 2014, the meeting will assemble countries receiving support from the CIF for geothermal projects and host countries involved in other (‘non-CIF’) geothermal projects, donor countries, project developers & financiers, multilateral development banks, representatives of the CIF Administrative Unit and a few selected additional participants.

Welcome to the Geothermal Dialogue

This session revisits the purpose and objectives of the Geothermal Dialogues and introduces focal themes and questions to guide our discussions. A tour de table will first introduce all participants and identify priority areas of interest of the Group.

  • Mafalda Duarte, Program Manager, Climate Investment Funds
    Presentation: CIF Role in Global Market Developments
  • Barbara K. Buchner, Senior Director, Climate Policy Initiative
  • Dr. Thomas Blunck, Member of the Board of Management, Munich Re

 

 


 

The Roles of the Public and Private Sector in the Sarulla Geothermal Power Plant Project (Indonesia)

This session discusses a case study on the Sarulla Geothermal Power Plant Project in Indonesia. The 3 x 110 MW project, once completed, will be largest geothermal project in the world. The long history, scale and complexity of the project would provide valuable lessons to stakeholders in accelerating geothermal development in Indonesia and globally. The project is sponsored by a consortium of Medco, Itochu, Kyushu and Ormat, and managed to secure $1.1 billion debt financing in May 2014. The first unit is expected to come on stream in September 2016.

Based on this concrete example, financiers and experts from the host country will comment on the roles of the public sector and the private sector (e.g., national policies, financing structure and risk allocation).

Chair: Jane Wilkinson, Director, Climate Policy Initiative

Overview Presentation on the Role of Geothermal in Indonesia::

Opening Comments:

  • Nachman Isaac, VP for Project Finance, Ormat Technologies
  • Lazeena Rahman, Investment Specialist, Asian Development Bank
Roundtable Discussion

The Roles of the Public and Private Sector in the Olkaria III Geothermal Power Plant Project (Kenya)

This session discusses a case study on the Olkaria III Geothermal Power Project in Kenya. The 110 MW project is the first privately funded and developed geothermal project in Africa and the first operated by a private independent power producer in Kenya. The project is characterized by initial exploration drilling carried out by the State electricity generating company KenGen, and subsequent exploration drilling and plant development by Ormat Technologies Inc. Ormat is the private entity that, through its wholly owned subsidiary Orpower 4, was awarded the ‘build, own and operate (BOO)’ tender for the geothermal facility. DEG and OPIC are among the major actors involved in the financing of the Olkaria III power plant. DEG arranged the provision of USD 105 million of debt capital, by leading a financing vehicle of 13 Development Finance Institutions to refinance the equity invested by Ormat for the development of the initial 48 MW. OPIC has contributed USD 310 million to refinance the earlier debt and finance two subsequent phases of the project.

Based on this concrete example, financiers and experts involved in the project will comment on the roles of the public sector and the private sector (e.g., national policies, financing structure, project development approach, risk allocation).

Chair: Mafalda Duarte, Program Manager, Climate Investment Funds

Introductory Comment on the Role of Geothermal in Kenya:

Overview Presentation on Olkaria III:

Opening Comments:

  • Nachman Isaac, VP for Project Finance, Ormat Technologies
  • Stephen Morel, Investment Analyst, Overseas Private Investment Corporation (OPIC)
Roundtable Discussion

Financing Geothermal Development: Perspectives from Project Developers and Financiers

This roundtable discussion focuses on recent developments from the financing perspective, with insights from projects developers, technology providers, and both public and private investors. Panelists will share experiences and explore how existing geothermal projects can identify viable financing and policy options to mitigate explorations risks, achieve economies of scale, reduce costs, and close the competitiveness gaps.

Chair: Barbara K. Buchner, Senior Director, Climate Policy Initiative
Presentation: Financing Geothermal Development: Perspectives from Project Developers and Financiers

Panelists:

Roundtable Discussion

 

The concluding session invites a broad discussion amongst participants to highlight priorities for the going forward. Based on the previous sessions, the aim is to draw preliminary lessons and highlight key issues that require further attention to render geothermal financing effective.

Moderation & wrap up: Barbara Buchner, Senior Director, Climate Policy Initiative

Conclusion and Next Steps
  • Mafalda Duarte, Program Manager, Climate Investment Funds
  • Barbara K. Buchner, Senior Director, Climate Policy Initiative

B. Buchner, M. Duarte