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 . 3
Selected Geothermal Project TA Activities Implemented by a Consulting Firm in 
Developing Countries
Source | ÍSOR 2011.
85
C h a p t e r 3
Selected
Projects
Worldwide
R
econaissance and pr
eliminar
y e
xplor
ation
A
dv
anced e
xplor
ation geoph
ysics
A
dv
anced e
xplor
ation, det
ailed mapping
A
dv
anced e
xplor
ation, geochemistr
y
Sit
e selection, w
ells
Dr
illing
, engineer
ing and management
W
ell logging
W
ell t
esting
R
esour
ce assessment
Dir
ect use
En
vir
. assessment, impact and monit
or
ing
C
ontr
act de
velopment and administr
ation
R
eser
voir monit
or
ing
, management and QC
Technology tr
ansf
er and capacit
y b
uilding
AFrICA
Kenya
1975-2011
Djibouti
1990-2008
Uganda
1995-2010
Rwanda
2009-2011
Eritrea
2008-2009
Ethiopia
2011
AMErICAS
Nicaragua
2004-2011
El Salvador
1968-2011
Chile
2009-ongoing
Argentina
2007-2008
Costa Rica
1995-2002
ASIA
Indonesia
2006-2010
Turkey
2008-2011
Iran
2005-2007
India
2011
Oman
2010
CArrIBEAN ISLANdS
Guadeloupe
1996-2011
Nevis
2011
Dominica
2010-ongoing
uNu-gTP
1979-ongoing
Source | ÍSOR 2011.

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86
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 
• 
Modalities for risk mitigation instruments to address resource risk. 
• 
Improvements to the tender process for granting exploration and development rights for
geothermal energy resources. 
• 
Guidelines on the scope and quality of information to be included in tender documents or
requests for bids.
• 
Private sector participation and PPP models suitable for geothermal energy investments.
• 
Local manufacturing development opportunities for geothermal exploration and power
generation equipment. 
To summarize, a number of donor-supported TA programs are currently available to help developing 
countries strengthen their technical and institutional capacity to develop and scale up geothermal 
energy utilization. 
B O x 3 . 3
World Bank Assistance to Scale-up Geothermal Energy in Indonesia
In Indonesia, the World Bank is helping strengthen the institutional capacity to scale-up geothermal development. 
A grant from the Global Environmental Facility (GEF) is assisting the Ministry of Energy and Mineral Resources’ 
dedicated Directorate for Geothermal to undertake a number of reforms, including: (a) development of a pricing 
and compensation mechanism for covering incremental cost and risks of geothermal development; (b) design of 
a credible tender process for bidding out new geothermal concessions; (c) identification of ways in which to best 
allocate geothermal resource risks; (d) undertaking the necessary reviews and revisions to existing regulatory 
framework for geothermal energy; and (e) clarification of environmental and social safeguards. 
These reforms are necessary if Indonesia is to successfully achieve its globally unprecedented scale-up of about 
4,000 MW of geothermal generation capacity under its accelerated program for expanding power generation 
capacity. Pertamina Geothermal Energy (PGE) is responsible for about a quarter of this target, and plans to expand 
its geothermal installed capacity from 272 MW at present to over 1,300 MW by 2015. The financing required for 
such a scale-up is estimated at about US$ 2 billion or higher and will also challenge the institutional capabilities 
of PGE to successfully implement a vast program. The World Bank, which is financing about 150 MW of the 
capacity expansion, facilitated a grant of about US$ 42.5 million from the government of the Netherlands to PGE 
during the preparation of the project. The objective of the grant was to augment existing expertise in PGE; prepare 
the project to meet industry and international standards; and strengthen the overall capacity of the company. Given 
the positive impact of this effort, an additional grant of about US$ 7 million was included as co-financing from the 
Government of New Zealand to enhance the institutional impact of the technical assistance to effect PGE’s entire 
investment program of over 1,000 MW. 
Source | World Bank 2011.

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87
C h a p t e r 3
POLICIES
Thirdly, supportive policies for attracting private investors are required for successful geothermal 
development. This is especially true if a country decides to move beyond a project-by-project 
approach to one that creates the right environment for investments in a scaled-up, nationwide effort 
to deploy geothermal power. While project-specific measures, such as individual power purchase 
agreements, may suffice to kick-start geothermal development in a country, nationwide approaches 
are more suitable in countries trying to meet significant quantitative targets for geothermal energy or 
pursuing expansion of their existing geothermal industry.
Ideally, the supportive policy environment should extend to all phases of the geothermal energy 
supply chain and include removal of barriers for off-take of geothermal energy by the grid operator 
and mechanisms for incremental cost recovery (if any) from the rate-payers (end users of electricity). 
Governments around the world have used price incentives (e.g., FITs), quantitative targets (quotas, 
etc.), priority dispatch, and other regulatory measures to support renewable energy, including 
geothermal. In addition to these measures, and arguably as a matter of even higher priority, 
governments can increase the cost-effectiveness of all renewable energy support by reducing fossil 
fuel subsidies. 
At the same time, in considering their policy options, developing countries should be aware of the 
costs of instituting and maintaining nationwide incentives for geothermal and other renewable energy 
development. A FIT has a cost, either covered by the final consumers or public finances. In either 
case, a sustainable, fair approach is needed to cover any extra price for clean energy in recognition of 
its domestic and global benefits. 
Policy interaction and sequencing is another important consideration if incentives to deploy any 
renewable energy (including geothermal) are to be effective. In addition to the incentives themselves, 
the existence of specific legal and regulatory provisions addressing the issues of land use, resource 
use, and allocation of rights need to be in place to avoid frustrating bottlenecks in renewable energy 
development (Azuela and Barroso 2011).