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

 
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The operational procedures of the facility should include incentives for the management to
apply prudent investment risk management principles and techniques.
Possible designs for a donor-supported geothermal development facility include: a direct capital 
subsidy or grant facility; a loan (on-lending) facility; and a risk guarantee or insurance facility. The 
choice of the design depends on the particular circumstances of the country or region and of the 
donor agencies involved. In principle, any of these designs can reduce the private investors’ risk and 
thus reduce the risk premium for the return on equity and the overall cost of capital, opening up new 
opportunities for attracting investments to scale up geothermal power.

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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