Green Green:  Financing News for the U.S. Geothermal Industry


Volume 1, Number 3
July 31, 2000

HOT NEWS

International Resource Assessment and Project Financing Tools Available

Japan's JBIC to Finance Geothermal Power Plant in Mexico

European Investment Bank Grants Loan to Kenyan Power Project

Mexico Seeks Geothermal Bids for Los Azufres Expansion

Chilean Government Opens Geothermal Resources to Private Development


REGULAR FEATURES

Geothermal Project Pipeline

Upcoming Events

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International Resource Assessment and Project Financing Tools Available

A compilation of recent geothermal resource assessments for China, Poland, and Turkey, plus the second edition of the Geothermal Financing Workbook, are available to the U.S. geothermal industry on CD-ROM or via download from Idaho National Engineering and Environmental Laboratory (INEEL). The reports are:

1 Geothermal Resources in China
by Liz Battocletti and Zheng Li (April 2000)
2 Geothermal Resources in Poland
by Deanna Broman and Liz Battocletti (November 1999)
3 Geothermal Resources in Turkey
by Liz Battocletti (September 1999)
4 Geothermal Financing Workbook, 2nd edition
by Liz Battocletti (November 1999)

To obtain a copy of the compilation report (Number INEEL/EXT-2000-844) on CD-ROM, contact Joseph Keller of INEEL (Tel: 208-526-1533).

The compilation report may also be downloaded from INEEL by searching under "INEEL Technical Reports & Conference Paper Preprints," and from the U.S. Department of Energy's Office of Science and Technical Information (OSTI).

In addition, Geothermal Resources in Hungary, which identified 74 sites and a total estimated power generation potential of 72 MWe, is also available to the U.S. geothermal industry.


Geothermal Resources in Hungary

The report, using information collected in an extensive data and Internet search dating back to 1972, includes detailed information on geothermal resources ranging in temperature from a low of 10ºC at Héviz to a high of 254ºC at Fábiánsebestyén. Seven sites have a temperature of at least 100ºC: Szentes, Szarvas, Álmosd, Mélykút-Pusztamérges, Oros, Nagyszénás-Fábiánsebestyén, and Algyõ.

The report also includes information on Hungary's power sector, its efforts to privatize, its future accession to the European Union, and legislation relevant to the development of geothermal power.

To obtain a copy of Geothermal Resources in Hungary in PDF format, contact Liz Battocletti.

All reports were prepared for INEEL and the U.S. Department of Energy, Assistant Secretary for Energy Efficiency and Renewable Energy, Office of Geothermal and Wind Technologies.

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Japan's JBIC to Finance Geothermal Power Plant in Mexico

The governmental Japan Bank for International Cooperation (JBIC) signed a loan agreement totaling US$ 71 million with Constructora Geotermoeléctrica de Pacifico S.A. de C.V. (CGP) to finance a private geothermal power plant in Mexico.

CGP is a wholly owned subsidiary established in Mexico by Japanese trading house Mitsubishi Corp. to implement the Cerro Prieto Geothermal Power Project.

The loan is being co-financed with BNP Paribas of France and ING Bank of the Netherlands, with JBIC assuming 60% of the total amount. It will be used to procure equipment services from Mitsubishi and Mitsubishi Heavy Industries Ltd. for the project. The project will build a geothermal power plant some 30 kilometers southeast of Mexicali in Cerro Prieto on the Baja California Peninsula. The plant will be leased to Comisión Federal de Electricidad (CFE) for 15 years.

Mexico has been promoting private participation in electric power projects as electricity demand in the country is expected to grow 5.8% annually through 2007.

The JBIC, the product of last October's merger of the Export-Import Bank of Japan and the Overseas Economic Cooperation Fund, is Japan's main foreign aid agency.

Source: TOKYO, 29 June (Kyodo)

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European Investment Bank Grants Loan to Kenyan Power Project

The European Investment Bank (EIB) granted a loan in 1999 of EUR 41 million (US$ 38.7 million) to Kenya for the construction of sub-stations and transmission lines for the Olkaria II geothermal power plant.

According to Permanent Secretary of the Energy Ministry Mwanyengela Ngali, Kenya has a geothermal power generation potential of over 2,000 MWe.

Created in 1958 and headquartered in Luxembourg, the EIB is the European Union’s (EU) long-term lending institution. The EIB supports projects in both EU and non-EU countries. It lent more than EUR 4 million to the latter in 1999. The EIB also financed the third unit of the existing Olkaria I Power Plant built in 1985 at a cost of approximately US$ 2 million.

Forced to ration power since September 1999, Kenya has a critical need for immediate additional installed capacity. A 100-year drought has caused water levels to fall in the country's hydroelectric dams. The United Nations has issued an emergency appeal for $88 million to feed 3.3 million Kenyans threatened with starvation as the result of the drought.

Source: NAIROBI, 6 June (Xinhua News Agency)

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Mexico Seeks Geothermal Bids for Los Azufres Expansion

Mexico's Comisión Federal de Electricidad (CFE) launched in June an international bid for a 100 MWe geothermal power project at Los Azufres. Located in Michoacan state, Los Azufres currently has a generating capacity of 93 MWe.

Actual construction will begin in mid- to late-2001, with commercial operation by mid-2003. The expansion is expected to cost 1.0 billion pesos (US$ 101 million). CFE will determine a winner sometime this year.

The expansion of the Los Azufres project is part of CFE's efforts to expand capacity to meet growing demand. Installed generation is now about 36,000 MWe. CFE's desired goal is 58,000 MWe by 2008.

Mexico's government has controlled the electricity industry since its nationalization in 1960, but in recent years has permitted private companies to build and operate power plants in exchange for pledges of investment.

Source: MEXICO CITY, 12 June (Reuters)

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Chilean Government Opens Geothermal Resources to Private Development

As of late June, private companies may now request licenses to exploit 120 geothermal energy resources in Chile, following the publication of the list in the country's federal register.

At the request of the Mines and Energy Ministry, the National Mining and Geology Service (Sernageomin) compiled the list from the country's 270 probable sources, assessed the sites' geothermal potential, and selected resources for private development under concession.

The published list includes resource locations, UTM vertex denomination, and surface or geographic areas. El Tatio in northern Chile's Region II is the geothermal resource with the greatest power generation potential, estimated at 50-100 MWe.

Chile has an estimated geothermal power generation potential of 2,350 MWe, according to the Preliminary Report: Geothermal Energy, The Potential for Clean Power from the Earth, issued by the Geothermal Energy Association.

To date, private companies have shown little interest in developing Chile's significant geothermal power generation potential since there was no legislation in place to safeguard their investments. The situation is now expected to change.

According to Sernageomin, a U.S. mission of geothermal specialists will visit Chile to explore the country's geothermal potential and stimulate exploitation of the country's geothermal resources.

There are currently no geothermal power projects in Chile. Any future projects would have to compete with existing generation on the interconnected grid.

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Geothermal Project Pipeline

The following projects are in various stages of development. Projects which have not been listed before are marked NEW.

Country Project Name Financing Source US$ (millions) 
Colombia Feasibility of Azufral Geothermal Field (TC9706344) English

Spanish
Inter-American Development Bank, Japanese Special Fund

Japanese consulting firms are required to carry out all of the studies but may subcontract up to 50% of the work.

$1.5 - Approved by the Board March 1, 2000
Costa Rica Miravalles III Geothermal Power Plant (1105/OC) Inter-American Development Bank, Private $70.0
Djibouti Assal Geothermal Power Plant (Feasibility Study) U.S. Trade and Development Agency $85.0
El Salvador Second Electric Development Program (Loan No. 838/OC-ES)

Stabilization and Rehabilitation of the Ahuachapán Geothermal Field Project
Inter-American Development Bank $332.0

Procurement underway.
Kenya
NEW
Olkaria II European Investment Bank $38.7

To co-finance the transmission lines and sub-station components of Olkaria II which will supply electricity to Nairobi
Latin America Renewable Energy in Latin America (TC9508279 and TC9508287) Multilateral Investment Fund $3.4 - In early stages of identification

Consultants would be hired to carry out feasibility studies.
Mexico Cerro Prieto Japan Bank for International Cooperation, BNP Paribas, ING Bank $120.0
Mexico Los Azufres II, 100 MWe CFE Tender $101 - Initiation of Project - 2001, Completion of Project - 2003
Mexico Off-Grid Rural Electrification (MXGE68390) World Bank, Global Environment Facility

The project will test private-sector implemented mechanisms for sustainable electrification of off-grid rural areas, using conventional and renewable energy technologies, as feasible.
$6.5 - Appraisal mission scheduled for early fiscal year 2001

Consulting services to be determined.
Philippines Rural Electrification World Bank

The project would support the National Energy Plan through investment support to provide selected rural areas with reliable electricity supply in a sustainable manner, including renewable energy.

First phase will support investments for off-grid rural electrification directed at achieving visible results on the ground within a relatively short term.
$50.0 - Project is being identified

Consulting services to be determined.
Poland Podhale Geothermal District Heating and Environment Project (PLPE37339 and PLGE57993) World Bank, European Union, Government of Denmark, Global Environment Facility, Local contribution, U.S. Agency for International Development $99.3
Poland Renewable Energy/Geothermal, District Heating for Zakopane (PLPA37339) World Bank $32.6 - Project preparation is underway

No consultants are required.
Portugal Azores

49% ownership by the Portuguese electrical utility, Electricidade de Portugal (EDP); 51% by the Azores electrical utility, Electricidade dos Acores (EDA).

Azores sources suggest that the Azores Government would be happy with the presence of a US company with the right technology, management record and resources as a strategic partner in the consortium.

$30.0
Russia Mutnovsky Independent Power Project, Kamchatka European Bank for Reconstruction & Development $353.2
Viet Nam Central Region Geothermal Power U.S. Trade and Development Agency $141.0
Viet Nam Rural Energy (VNPE56452) World Bank

The project's main development objective is to expand rural access to electricity in about 671 communes located in 32 provinces of Viet Nam through grid extension.

The project will also promote the application of renewable energy sources.
$150.0 - Negotiations were scheduled for late April 2000

Consulting services to be determined.

Sources: United Nations Development Business; the Infrastructure Division; the International Trade Administration, U.S. Department of Commerce Global Infrastructure Projects Database; others as noted.

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Upcoming Events

August November
September December
October 2001

6-17 August
31st Session of the International Geological Congress
Rio de Janeiro, Brazil
Email: Andrea Förster or Valiya M. Hamza

29-31 August
Clean Energy Trade Mission to Indonesia
U.S. Department of Commerce
Kathryn Hollander, Trade Advisor
Tel: (202) 482-0385; Fax: (202) 482-5666

10-14 September
Clean Energy Trade Mission to Mexico
U.S. Department of Commerce
Sam Beatty, Trade Advisor
Tel: (202) 482-4179; Fax: (202) 482-5666

12-13 September
Web site: Third Annual Turkish Energy Conference
Ankara, Turkey
At The Economist Conferences’ Turkish Energy Conference, you will have a unique opportunity to debate the future of this key economic sector. Respected by government, major companies and investors as the “must attend” energy conference, this strategic meeting will provide answers to the key questions every energy company must ask.

13-15 September
Web site: Southeast Europe Energy & Transportation Conference
Philadelphia, PA
U.S. Trade & Development Agency
Hundreds of millions of dollars have been pledged for infrastructure projects in electricity, oil and gas, rail, ports and waterways, airports, roads, and bridges. The conference is designed to help you take full advantage of these project opportunities.

14-15 September
Web site: 2nd Annual Private Power in Africa
Washington, D.C.
Center for Business Intelligence
Growth in power demands for sub-Saharan Africa is anticipated to increase by 3.6% annually over the period 1999-2020, with demand growth in some smaller countries exceeding 9-10%. This expansion translates to some 1600-2000 MWe per year of new capacity. Learn how you can benefit from these emerging opportunities. Hear regulatory updates on western and southern Africa

24-27 September
Web site: Geothermal Resources Council Annual Meeting: Ushering in a Geothermal Millennium
San Francisco, CA

TBD October
U.S.-China Renewable Energy Business Development
Kunming, Yunnan Province, China
Email: Lee Gebert, DOE

DOE will organize a one-day U.S.-China Renewable Energy Business Development meeting to coincide with China's 21st Annual Solar Thermal Conference. Although it is a solar conference, other types of renewable energy will be discussed at the conference.

TBD October
Seminar on the Role of Geothermal Energy in Sustainable Development
Radziejowice, Poland
Email: Kazanowska Agnieszka

1-5 October
Clean Energy Trade Mission to the Czech Republic and Poland
U.S. Department of Commerce
Email: Andrew Collier

5-7 October
Web site: 4th Annual U.S.-Russian Investment Symposium
Harvard University
Boston, MA

12-13 October
U.S. Eco-Energy 2000 Exhibition and Seminar
U.S. Trade Center, Tokyo, Japan
Email: Ms. Yoko Hatano, Mr. Kenji Kobayashi, or Kenneth B. Reidbord
The purpose of this two-day event is to provide a forum under the U.S. Embassy's sponsorship for American suppliers of environmentally friendly energy related technologies to gain market exposure in Japan.

15-21 October
Clean Energy Trade Mission to Russia
U.S. Department of Commerce
Rachel Halpern, Trade Advisor
Tel: (202) 482-4423; Fax: (202) 482-5666

23-25 October
Web site: Power and Energy in the Americas
Houston, TX
U.S. Trade and Development Agency
The conference will cover opportunities in Argentina, Bolivia, Brazil, Chile, Colombia, Ecuador, Mexico, Peru, Uruguay, Venezuela, and several Caribbean countries. Senior officials from the U.S. and project sponsors from the region will discuss upcoming developments in the energy sector from a business perspective and provide detailed information on more than 40 public and private-sector projects currently on the drawing boards.

25-26 October
Asia Geothermal Symposium 2000
Bangkok City, Thailand
Email: Taigo Wada

26 November-5 December
Clean Energy Trade Mission to India
U.S. Department of Commerce
Nazir Bhagat, Trade Advisor
Tel: (202) 482-3855; Fax: (202) 482-5666

28 November-1 December
Web site: China International Environment, Renewables, and Energy Efficiency Exhibition and Conference -- CERE' 2000
Beijing, China
Email: Mr. Yong Zhang, Ms. Xuemei Hu, or Mr. Yu Fan
This conference covers climate change, renewable energy, energy efficiency, and sustainable transportation.

4-8 December
Clean Energy Trade Mission to Beijing, Chengdu, and Guangzhou
U.S. Department of Commerce
Email: Kathryn Hollander, Trade Advisor

4-8 December
Web site: Village Power 2000: Empowering People and Transforming Markets
Washington, D.C.
World Bank
Email: Barbara Ferris, NREL

2001

29-31 January
Web site: 26th Stanford Workshop on Geothermal Reservoir Engineering
Palo Alto, CA
The workshop will bring together engineers, scientists, and managers involved in geothermal reservoir studies and developments; provide a forum for the exchange of ideas on the exploration, development, and use of geothermal resources; and enable the prompt and open reporting of progress.

24-26 April (tentative)
U.S.-China Clean Energy Symposium and Exhibition
Beijing, China
Ministry of Science and Technology
Email: Lee Gebert, DOE
Email: Debra Lew, NREL

8-10 May
Email: Sustain 2001: the World Sustainable Energy Conference
Amsterdam, The Netherlands

21-25 October
Web site: 18th World Energy Congress
Buenos Aires, Argentina

Other geothermal and related calendars:

To have your event listed, contact Liz Battocletti.

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Watch for the next issue of Green Green coming
September 30, 2000

THE SMALL PRINT

Green Green is produced for the Idaho National Engineering & Environmental Laboratory (INEEL) under Purchase Order No. K99-181018 and the U.S. Department of Energy, Assistant Secretary for Energy Efficiency and Renewable Energy, Office of Geothermal and Wind Technologies.

This information was prepared as an account of work sponsored by an agency of the U.S. Government. Neither the U.S. Government nor any agency thereof, nor any of their employees, makes any warranty, express or implied, or assumes any legal liability or responsibility for the accuracy, completeness, or usefulness of any information, apparatus, product, or process disclosed, or represents that its use would not infringe privately owned rights. Reference herein to any specific commercial product, process, or service by trade name, trademark, manufacturer, or otherwise, does not necessarily constitute or imply its endorsement, recommendation, or favoring by the U.S. Government or any agency thereof. The views and opinions of authors expressed herein do not necessarily state or reflect those of the U.S. Government or any agency thereof.


Bob Lawrence & Associates, Inc.
345 South Patrick Street
Alexandria, Virginia 22314
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Phone: 703 836 3654 / Fax: 703 836 6086
Email: lbatto@huskynet.com

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