Less project financing for geothermal in 2017, with better outlook for 2018
The $1.4 billion in project financing made available for geothermal projects world wide in 2017 represent a drop of 36% compared to the previous year, so a new report by Frankfurt School – UNEP Collaborating Centre and Bloomberg New Energy Finance. But with financing announced this year, the outlook is much better for 2018.
In the recently published report on “The Global Trends in Renewable Energy Investment 2018“, released yesterday by UN Environment, the Frankfurt School-UNEP Collaborating Centre, and Bloomberg New Energy Finance, it is reported that developing continues to be driven by falling costs for solar electricity, and to some extent wind power,
Last year was the eighth in a row in which global investment in renewables exceeded $200 billion – and since 2004, the world has invested $2.9 trillion in these green energy sources. Overall, China was by far the world’s largest investing country in renewables, at a record $126.6 billion, up 31 per cent on 2016.
While these are overall very positive news for the deployment of renewable energy technologies, it is sad to see that the project financing for geothermal energy actually decreased by 36% between 2016 and 2017.
Geothermal project financing decreased by 36% between 2016 and 2017, with $1.4 billion invested, the lowest level for four years.
Some 11 significant projects reached financial close last year, with Indonesia and the Netherlands accounting for three projects each. Indonesia’s Supreme Energy Muara Laboh Geothermal Plant Phase I, with 80MW of capacity and costing $600 million, was the largest geothermal project in 2017, and the 55MW ICE Borinquen I Geothermal Project in Costa Rica for $230 million came in second place.
Indonesia holds 40% of the world’s geothermal power potential, according to estimates, and the country aims to install 4.4GW of that technology between 2017 and 2026. Favourable regulation for geothermal development includes expedited permitting for drilling rights, although a lack of reliable mapping can hinder exploration activity.
With larger projects having just recently secured funding, including the Rantau Dedap project in Indonesia and others, the picture looks better for 2018.
Here some of the key financing announced in 2018:
- Djibouti – $27 million loan for geothermal project
- Indonesia – $540 million loan for Rantau Dedap project by Storengy/ Supreme Energy by JBIC, ADB and others
- China – $250 million loan for geothermal district heating projects by ADB
- Ethiopia – $375 loan by the World Bank on electrification efforts (incl. geothermal)
- Turkey – $85 million loan on energy investment by EBRD, incl. geothermal
- Philippines – $90 million loan to EDC by IFC
So things look better for 2018 and with a large number of additional projects reaching advanced stages in development, project financing for geothermal projects could see a jump this year.
Source: FS UNEP Centre