| Abstract |
Geothermal energy projects are generally small and often located in rural areas. These projects are also characterized by higher initial capital costs, on a cost/kilowatt basis, than large thermal power projects due to the fact that these capital costs include a lifetime supply of fuel. The combination of a sustainable non-fossil fuel and local rural power generation results in social, economic and technical benefits which makes geothermal energy projects highly desirable for emerging markets and developing countries. However because of their very nature geothermal energy projects face a number of financing hurdles, including: (a) barriers due to higher capital costs and credit risk issues in developing countries; (b) subsidized use of fossil fuels; (c) statutory limitations in the method by which multi-lateral agencies share project financing, and (d) time consuming and expensive reviews of projects, which may delay and even preclude project implementation. See Delphos (1996). Fast track financing of private sector geothermal projects, and recognition of the real value of the benefits of geothermal power, will provide the opportunity for development of new geothermal projects worldwide. Financing participants should choose a team leader, establish a budget for financing costs and set a closing timetable. Host countries and multi-lateral agencies should provide quantifiable credits for geothermal benefits. Six months from planning through financing approval should be the realizable goal so that projects are developed when and where they are most needed. |