Geothermal handbook: PlanninG and Financing power Generation t e c h n I c a L r e p o r t 2 / 2

F I g u r E 3 . 1 2
An On-Lending Facility for a Portfolio of Geothermal Projects
Private investment
Financing from iFis
 (concessional loans, Grants)
$$
$$
$$
$$
$$
$$
$$
$$
Project
$$
Source | Authors’ adaptation of a diagram presented in the 2008 Geothermal Technologies Market Report (US DOE 2009).
Project
Project
Project
Project
Project
Project
Project
Project
on-lending 
Facility

---

120
G e o t h e r m a l H a n d b o o k : P l a n n i n g a n d F i n a n c i n g P o w e r G e n e r a t i o n 
120
on-lending facility
. On-lending schemes are common for IFI-supported operations with multiple 
sub-borrowers. In the stylized schematic of Figure 3.12, the on-lending facility borrowing concessional 
funds from the IFIs could be a development bank or similar entity with portfolio management expertise. 
The on-lending facility would establish a pool of investment funds from the IFIs and private investors. 
The blended cost of capital available to sub-borrowers (geothermal projects or prospects) from this 
facility would be significantly lower than the cost of capital to support this activity obtained solely 
from private debt and equity markets. Investments would be made under a determined set of criteria, 
designed to limit loss exposure within single projects, geographies, and activity types. The goal of the 
structure would be to reduce the concentration of risk by ensuring as broad a portfolio of geothermal 
development investments as possible.
59