World Bank targets $500M for geothermal energy plan

Hot water pipes of a geothermal power plant in Krafla, Iceland. The World Bank urges the aid community to help developing countries tap their geothermal resources. Photo by: João Almeida / CC BY-NC-SA

As energy supplies dwindle, the World Bank is urging the aid community to pool efforts to help light developing countries with geothermal power.

At the recent Iceland Geothermal Conference in Reykjavík, World Bank Managing Director Sri Mulyani Indrawati asked donors, multilateral banks, governments and the private sector to participate in a plan that aims to boost renewable power generation in developing countries by tapping unused geothermal energy resources.

The Global Geothermal Development Plan centers on better managing and lowering the risks and costs of exploratory drilling for geothermal projects which have been obstacles to past geothermal energy development. The GGDP would fall under the bank’s Energy Sector Management Assistance Program.

“Geothermal energy could be a triple win for developing countries: clean, reliable, locally-produced power,” said Sri Mulyani. “Only a global effort will put geothermal energy in its rightful place  as a primary energy source for many developing countries.”

The target: to mobilize $500 million under the plan. According to a World Bank statement, donors can take part in the plan through bilateral assistance, helping to pinpoint feasible projects, and current channels like the Climate Investment Funds or the Global Environment Facility.

Later this year, the World Bank will assemble donors around discussions on the financing of specific geothermal projects under the plan.

To get the ball rolling for the GGDP, the World Bank and Iceland government have united under a “geothermal compact” to promote technical assistance and surface exploration studies for countries in Africa’s Rift Valley.

More developing countries await the development of their untapped geothermal resources. The bank reports that at least 40 of these countries have not tapped their extensive geothermal supply, including those in East Africa, Southeast Asia, Central America and the Andean region.

This could be the answer to the energy crisis that has riddled many developing countries across the globe in recent years, counting Ghana, Indonesia, Jordan, Kenya, the Philippines, and more. World Bank data put the global geothermal electricity capacity reach at only 0.3 percent of total global power generation.

In 2012, World Bank financing for geothermal development surged to $336 million, up from $73 million in 2007. It now makes up almost 10 percent of the bank’s total renewable energy lending.

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  • Johannamorden profile

    Johanna Morden

    Johanna Morden is a community development worker by training and a global development journalist by profession. As a Devex staff writer based in Manila, she covers the Asian Development Bank as well as Asia-Pacific's aid community at large. Johanna has written for a variety of international publications, covering social issues, disasters, government, ICT, business and the law.