The European Investment Bank has approved funding of € 80 million to unlock up to € 500 million in funding for geothermal energy projects led by the private sector in East Africa.
As part of a larger € 4.1 billion funding program to accelerate investments in renewable energy, support economic resilience to COVID-19 by supporting private sector investments, improve sustainable transport and modernize schools and social housing, the European Investment Bank (EIB) has approved a special program on renewable energies.
“The projects approved today underline the EIB’s commitment in Europe and around the world to unlock private and public investments that respond to local priorities and global challenges. Tomorrow I will update EIB Governors, EU Finance and Economics Ministers on the EU Bank’s rapid response to the challenges caused by the COVID-19 pandemic and our support strong and growing focus on green transition and climate action around the world, ”said Werner Hoyer, President of the European Investment Bank.
The EIB has approved new support for large-scale solar power generation in Spain, small-scale renewable energy projects in Germany, support for investments in clean energy and energy efficiency by companies in Austria and geothermal energy in East Africa.
For East Africa, funding of € 80 million has been approved for the Rift geothermal project in East Africa.
The operation is an envelope intended to finance individual private sector investments in geothermal power generation projects in various countries of the East African Rift region. The sub-operations under the envelope will be the subject of individual project evaluations and will be approved separately for Bank financing.
Funding is available for the following countries: Burundi, Comoros, Djibouti, Eritrea, Ethiopia, Kenya, Madagascar, Malawi, Mauritius, Mayotte, Mozambique, Réunion, Rwanda, Seychelles, Somalia, South Sudan, Tanzania and Uganda.
The proposed envelope will allow the EIB to finance several projects implemented by promoters active in the geothermal energy sector in the region (individual private sector investments in geothermal energy production). Eligible projects will generally include the development of pristine sites and extensions of contaminated sites, with proven geothermal resources. Investments in geothermal energy will help diversify the baseline renewable electricity supply in the region and help reduce greenhouse gas (GHG) emissions compared to fossil fuel-based alternatives, thereby supporting the sustainable economic development of the East African Rift countries.
While the financing offered by the EIB amounts to EUR 80 million, the total cost is estimated at EUR 500 million.
The overall environmental impact and residual environmental risks of the operation are unknown at this stage and will be assessed during the assessment of individual projects. Potential negative 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 labor camps, archaeological and cultural heritage sites, landscape and biodiversity. Gender equality and / or women’s empowerment will also be assessed, where applicable. The Bank will require the Promoter to ensure that the implementation of the sub-operations, including the associated transmission lines and other associated facilities, is carried out in accordance with the environmental and social policy and standards of the bank. Cumulative impacts at the project level and the possible need for a comprehensive strategic environmental assessment in a specific region or country will be assessed in more detail.
The Bank will require the Promoters to ensure that the procurement procedures for the sub-operations follow the Bank’s Guide to Procurement.
Details on upcoming tenders can be found here in the future.
Source: European Investment Bank (EIB)