Geothermal Energy Development in Latin America and the Caribbean and the Role of International Development Partners

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Geothermal Energy Development in Latin America and the Caribbean and the Role of International Development Partners ( geothermal-energy-development-latin-america-and-caribbean-an )

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 El Salvador: Geothermal Regional Training Center  Mexico: 1.58 million USD in geosciences and regulatory studies  Nicaragua, San Jacinto: 40 million USD private sector loan At the Roundtable of the Global Geothermal Development Plan in November 2013 in De Hague the IDB outlined the following experiences in geothermal energy financial structuring and future plans. Figure 8 shows different financial support mechanisms planned to be provided by the IDB and other partners. Figure 8: Financial support structure and mechanisms provided by the IDB and other partners for geothermal energy projects (Guzman, 2013) 3.3 Global Geothermal Support Scheme The Energy Sector Management Assistance Program (ESMAP) of the World Bank launched the Global Geothermal Development Plan (GGDP) in 2013 in collaboration with bilateral and multilateral development agencies, banks and client countries. The GGDP is expected to be transformational by creating a global momentum in geothermal energy investments through a concerted focus on exploratory test drilling. So far already 115 million USD were acquired from the Clean Technology Fund. In Latin America and the Caribbean the GGDP dedicated support to Nicaragua, Dominica; two additional projects are implemented by the Inter-American Development Bank in Chile and Mexico (ESMAP 2014) In Latin America and the Caribbean the GGDP identified 17 sites as primary and secondary target fields for exploratory drilling (ESMAP 2014). Examples of potential geothermal hydrothermal fields technically ready for further exploration drilling. The 17 sites are located in 12 countries in Latin America and the Caribbean. 3.4 Analysis of Project Approaches and their Effectiveness With the above project approaches presented it becomes clear that different financial and technical portfolios are applied for different demands and conditions. Technical cooperation projects are advisable to build human and institutional capacity, raise awareness among decision-makers and planners and assist governmental entities is establishing appropriate regulations, regulatory frameworks (concessions, exploration/ exploitation licenses, geothermal law, etc.) and energy strategies. Expected impacts include a more effective regulatory regime, improved ownership over energy processes by political decision-makers and a competent workforce for geothermal energy projects. The financial risk mitigation schemes outlined above aim to create investor friendly conditions by providing financial incentives for the exploration phase and reimbursement mechanisms when drilling operations were not successful. This includes 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. With the existence of the fund it is expected that access to equity or other funding sources is improved. As a result, reduced risks and costs for early stage geothermal development are expected to encourage the development of further geothermal investments. Often, an additional technical assistance component helps to gather outstanding data of surface studies to define the drilling location. Sander 9

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