This week, Japan’s Prime Minister, Shinzo Abe, will announce the east Asian’s commitment to fund geothermal power projects across Africa during a conference in Kenya, Nairobi.
Having identified Kenya and Ethiopia as the primary target regions, Africa has only developed 5% of this clean power fuel, which according to the Nikkei Asian Review is due to the high associated costs of drilling down to heat reservoirs and building the plants themselves.
According to media, those Japanese players with a vested interest in the sector, are seeking to boost the existing 600,000kW of geothermal capacity to more than 1 million kilowatts in the east African region.
Japan to drive geothermal developments
For the initial phase, the Japanese government has earmarked over $9.97 million for grant provision as part of a supplementary budget for the current fiscal year, media reported.
The media added that total grants will cover a portion of preconstruction-stage costs, which can run to $100 million.
“In addition, Tokyo will make low-interest loans from the Japan International Cooperation Agency and other financing available for African geothermal projects that have reached the construction stage,” the Nikkei Asian Review reported.
Active market players
Predominant market players globally include Japanese groups Toshiba, Mitsubishi Hitachi Power Systems and Fuji Electric.
The Nikkei Asian Review highlighted: “Trading house Toyota Tsusho and Toshiba, which won a 2011 contract for geothermal power facilities in Olkaria, may provide additional capacity.
“Other pairs of contenders include Mitsubishi Corp. and Mitsubishi Hitachi Power, and Marubeni and Fuji Electric. Meanwhile, Toyota Tsusho and national utility Kenya Electricity Generating are planning feasibility studies for geothermal installations beyond that region.”