Ms. Kirsten Offermanns, KfW Bank Iceland Geothermal Conference 2013 March 5-8, 2013, Harpa, Reykjavík

1. Bank aus Verantwortung
Geothermal Risk Mitigation Facility
„GRMF“
Kirsten Offermanns
Reykjavik „Iceland Geothermal Conference“ 7 March 2013

2. 2Geothermal Risk Mitigation Facility "GRMF" Reykjavik March 2013
Index
1 KfW
2 Objective & Design of GRMF
3 Application Procedure
4 Status Quo & Outlook

3. Bank aus Verantwortung
KfW

4. 4Geothermal Risk Mitigation Facility "GRMF" Reykjavik March 2013
Budget Funds (2011: EUR 1.614 Mio.)
Financial Cooperation - (FC)
2. FC-Development loans
2.1 Mixed financing
2.2. Composite financing
2.3. Reduced-interest loans
Budget funds: EUR 134 million.
KfW funds: EUR 1.579 million.
3. FC promotional loans
EUR 996 million.
KfW—Funds (2011: EUR 2.575 Mio.)
1. Budget funds only
1.1. Grants: EUR 1.336 million.
1.2 Loans IDA-Conditions:
EUR 133 million.
1.3 Grants FC-Standard-
Conditions: EUR 12 million.
Concessional finance
Financing Instruments of KfW Entwicklungsbank
Grants, Development Loans, Promotional Loans
Note: Numbers without mandates (2011: EUR 343 m.)

5. 5Geothermal Risk Mitigation Facility "GRMF" Reykjavik March 2013
Locations
KfW Entwicklungsbank
Manila
Taschkent
Jerewan
Baku
Tiflis
Jakarta
Beijing
Ulan Bator
Bangkok
HanoiDhaka
Phnom Phen
Kathmandu
Kabul
Islamabad
Bishkek
Dushanbe
Neu-Delhi
MumbaiMexiko-Stadt
São Paulo
Managua
BrasiliaLa Paz
Lima
Tegucigalpa
Quito
Bogotá
Guatemala-Stadt
Kairo
Sana´a
Amman
DamaskusRamallah-Al-BirehRabat
Windhoek
Addis Abeba
Maputo
Daressalam
Nairobi
Kampala
Lusaka
Pretoria
Kigali
Ouagadougou
Dakar
Accra
Jaunde
Bamako
Cotonou
Kinshasa
Niamey
Lilongwe
Abu Dhabi
Johannesburg
Moskau
Ankara
Skopje
Belgrad
PrištinaSarajevo
Podgorica
Tirana
Kiew
Istanbul
San Salvador
Juba
Jerewan
Tunis
October 2012

6. 6Geothermal Risk Mitigation Facility "GRMF" Reykjavik March 2013
Energy & Geothermal in Subsaharan Africa & worldwide
› Kfw supports geothermal development
worldwide (Germany, Indonesia, Chile,
Kenya…)
› For more thank 15 years KfW finances
geothermal projects in Kenya for public &
private partners
› KfW financed these projects at different
stages & with different means
› Grant funding (also for training
measures and technical support)
› Subsidised loans
› Loans on commercial terms

7. Bank aus Verantwortung
Objective & Design of GRMF

8. 8Geothermal Risk Mitigation Facility "GRMF" Reykjavik March 2013
Geothermal specific investment barriers
› Geothermal development means:
High upfront investment costs + High risk of failure (in SSA even higher)
› Therefore the experience has shown that:
The initial financial burden is too high for project developers
(be it public or private or public private partnership)
› What can we do?

9. 9Geothermal Risk Mitigation Facility "GRMF" Reykjavik March 2013
Objective of GRMF
Direct grants
• 80% for Surface studies
• 40% for Exploration Drilling
• 20% for infrastructure
Continuation premium
30% of the approved drilling
costs if the Developer
undertakes subsequent
development steps within a
defined period of time
Regional geothermal
database
To reduce risks of future
wells
To encourage public & private investors
to mobilise financing for development of
geothermal power plants in East Africa
Pilot Countries: Ethiopia, Kenya, Rwanda, Tanzania, Uganda
Objective:
Instruments
To encourage public & private investors
to mobilise financing for development of
geothermal power plants in East Africa
Pilot Countries: Ethiopia, Kenya, Rwanda, Tanzania, Uganda
Objective:
Instruments
1 2 3

10. 10Geothermal Risk Mitigation Facility "GRMF" Reykjavik March 2013
Project Design of GRMF
AUC Regional Geothermal Coordination Unit (RGCU)
•Information and Coordination of Developers, Donors etc.
•Evaluation of Geothermal Projects (especially for GRMF)
20 Mio. €
EU- ITF
Grants for Surface
Studies & Exploration
Drillings
Continuation Premium
Regional Information
Private/
Public
Investor
30 Mio. €
Geothermal
Risk Mitigation
Facility
Private/
Public
Investor

11. Bank aus Verantwortung
Application Procedure

12. 12Geothermal Risk Mitigation Facility "GRMF" Reykjavik March 2013
Application Procedure I
› Competitive & transparent two-stage Application process
› It is planned to conduct at least 3 application rounds.
› There will be one application round including prequalification each year.
› Information workshop 11.10.2012
› Start of the first application round 17.10.2012
› End of first prequalification period (4 weeks) 13.11.2012
› Pre-bidding workshop for shortlisted bidders 26.02.2013 (Drilling Applications: 3 days)
› The whole application procedure will take approximately one year:
›  Grant Agreements with successful Applicants are expected to be
signed in September 2013

13. 13Geothermal Risk Mitigation Facility "GRMF" Reykjavik March 2013
Application Procedure II

14. Bank aus Verantwortung
Status Quo & Outlook

15. 15Geothermal Risk Mitigation Facility "GRMF" Reykjavik March 2013
First „Results“ / Status Quo
› Prequalification phase ended 13 November 2013
› 14 Applications
› More than 50% of Applications for Drilling Projects
› 4 out of 5 countries submitted an Application
› Public, Private & Public Private Partnerships have applied
› Institutions and companies from East Africa & International Companies
› The requested financial support amounts to approx. USD 70 mio. ( = EUR 50 mio.)
› For Round 2 and 3 additional funds are required

16. 16Geothermal Risk Mitigation Facility "GRMF" Reykjavik March 2013
Outlook

17. Bank aus Verantwortung
Thank You for Your Attention!