| Keywords |
sustainable rural development, poverty reduction, GHG, climate change, legal and regulatory regime, private sector participation, market based tariff structure, and measures to stimulate market mechanism. |
| Abstract |
1. Community-based Geothermal Resources Development for Poverty Reduction: Most geothermal sites in the developing countries are located in rural areas where the population generally lives below the national poverty level. The challenges facing economic development efforts in these remote areas for poverty reduction are varied and complex and include: (a) lack of employment-generating programs; (b) lack of electric power supply to sustain economic development; (c) limited livelihood opportunities; (d) limited human capital investment and development; (e) lack of empowerment; (f) lack of financial services for the poor; and (g) piecemeal approach to poverty reduction and limited over-arching anti-poverty programs. The community-based geothermal energy projects will help to (i) meet local electricity demand in an environmentally and socially sustainable manner; (ii) improve access of rural areas to modern electricity services, (iii) support rural development and economic activities in remote areas while yielding positive environmental and social impacts, (iv) reduce pressure on forestry resources which are used to meet household heating and cooking needs, (v) reduce greenhouse gas emissions that would otherwise be produced from diesel-based generator use, and (vi) reduce poverty and improve standards of living for the poor through provision of community-level infrastructure. 2. Policies for Private Sector Funding Sustainability: The investment requirement for geothermal development is huge. However, because of limited resources, and the competing demand of other sectors of the economy, most governments of the developing countries cannot allocate such a large capital outlay from their budgetary appropriation, and thus, will have to seek private sector investment. To attract such large private sector investments for geothermal development and power generation, the governments must ensure investors confidence by setting a competitive tariff structure to yield a reasonable return on investment; establish a transparent legal and regulatory regime with adequate enforcement mechanisms; ensure transparent bidding and tendering procedures for new projects which must be perceived as fair by all concerned parties; and a fair and favorable taxation regime. Thus, a policy framework for the development of geothermal resources specifically for those located in remote areas should be formulated by the governments. What is also needed is a development framework, acceptable to all, to manage and to develop the untapped geothermal resources for a least-cost generation expansion plan. If all aspects are designed appropriately and implemented well within responsibly-managed fiscal space, addressing environmental and social issues, benefit sharing, using state-of-the art analytical tools, strengthening institutions and capacity building, and the consultation process fully integrated into the decision making norms, the geothermal resources will be a major source of growth and prosperity for these countries. |