Icelandic Minister for Foreign Affairs Össur Skarphéðinsson today presented the most extensive development project Iceland has participated in, an international project on geothermal feasibility assessments and test drilling. The project includes the World Bank Global Geothermal Development Plan, estimated to amount to USD 500 million (ISK 64 billion, EUR 393 million).

Engilbert Guðmundsson, Pasi Hellman, Össur Skarphéðinsson, Egill Heiðar and Rohit Khanna at the signing of the agreement on co-financing of the first phase of the project.

The collaboration between Iceland and the World Bank is the largest initiative for promoting the utilization of geothermal energy in developing countries, making Iceland a key partner in the field.

The project targets 13 states of the Great Rift Valley in East Africa which are heavily impacted by energy poverty; Djibouti, Ethiopia, Uganda, Eritrea, Kenya, South-Sudan, Tanzania, Malawi, Mozambique, Burundi, Rwanda, Zambia and Somalia.

Experts believe that the region has a geothermal potential of 14,000 MW, which could provide up to 150 million people access to clean and renewable energy.

An agreement between the Nordic Development Fund (NDF) and Iceland on co-financing of the first phase of the project was also signed today with each party to contribute EUR 5 million (USD 6.3 million, ISK 818 million) to the project over the five-year period. The Icelandic Development Agency, ICEIDA, is playing a major role in the project.

As stated in a press release from the Icelandic Ministry for Foreign Affairs, Iceland will, with the support of NDF, assist the 13 states with geotechnical investigations of promising sites, detailed geophysical, seismic, environment and chemical tests including test drilling and assessments.

The World Bank will collaborate with Iceland and partners to establish a flexible financing facility to share the costs and risks of specific drilling programs. It is anticipated that should the drilling give positive results, the private sector will participate in the harnessing of geothermal energy for electricity production.

Össur signed the agreement, along with Pasi Hellman, the new Managing Director of the Nordic Development Fund, and Engilbert Guðmundsson, the Director General of Iceland‘s International Development Agency. Program Manager of the Energy Sector Management Assistance Program Rohit Khanna represented the World Bank. Chairman of the Nordic Development Fund Egill Heiðar was also in attendance.

Related story:

January 25 | Iceland Makes Energy Deal with World Bank

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