The objective of the Facility (GDF) is to encourage public and/or private investment in geothermal power development in Latin America. Funding is available for the following activities:
- Geoscientific surface studies to determine the optimal location of reservoir-confirmation wells at the most promising geothermal prospects.
- Drilling and testing of reservoir-confirmation wells at the most promising geothermal prospects to assist developers in securing financing for subsequent development phases.
GDF will provide financial support to assist in mitigating geothermal exploration risk. The GDF is the first multidonor climate initiative to promote geothermal energy within Latin America. It is expected to improve access to equity or other funding sources for geothermal developers in the region, and to play a catalytic role in establishing geothermal energy as a strategic option in power-expansion planning within the participating countries.
As this program is the first multi-donor scheme to support geothermal energy on a regional scale in Latin America, it is expected to prove transformational in terms of:
- Improving development frameworks by reducing existing financial, technical and legal barriers for the development of geothermal energy,
- Encouraging more geothermal development in Latin American countries,
- Creating a market for geothermal energy by being a catalyst for the first commercial geothermal projects in the Andean region,
- Increasing local geothermal industry capacity, increasing economic growth and,
- Significantly reducing Green House Gas emission growth and to enhance energy security through diversification of energy matrices across the region.
In addition to the support of many existing Development Finance Institutions (DFI) the facility will be designed to allow further participation of, and contributions by interested donors and financiers. The goal of the facility is to catalyze development of a minimum of 7 geothermal plants with a cumulative capacity of at least 350 MW at a total estimated investment of at least €1 Billion with the optimistic target being €2 Billion.