A $2.7 million GEF grant to help spur investment in non-conventional renewable energy source
Colombia will promote investment in non-conventional renewable energy sources and lay the groundwork for its first geothermal project with a $2.7 million grant from the Global Environment Facility (GEF) administered by the Inter-American Development Bank (IDB).
Colombia, which currently obtains up to 70 percent of its electricity from hydraulic sources, has yet to tap its potentially vast geothermal resources, which would allow it to harness the virtually unlimited heat from the Earth’s core. Geothermal power generation produces less waste and pollution than conventional resources such as coal or oil but with high upfront development costs.
The IDB, which has nearly three decades of experience with geothermal projects, is encouraging countries in Latin America and the Caribbean to develop alternative low-carbon energy sources to mitigate greenhouse gas emissions.
This new IDB-backed project, which was approved by the Bank's Board of Executive Directors on Tuesday July 5, will assist the Colombian government in developing a regulatory framework to foster the use of non-conventional renewable energy by establishing adequate incentives and removing barriers to investments in geothermal power projects.
This part of the project, which will be executed by Colombia’s Ministry of Mines and Energy’s Planning Unit, will also update the country’s database of information on available non-conventional renewable energy resources.
A second component, to be carried out by ISAGEN, a Colombian public-private utility company, will focus on the technical, environmental and social studies required to assess and validate the geothermal potential in the sites of the Macizo Volcanico del Ruiz, a volcanic massif in Colombia’s central mountain range.
The studies conducted under this component will complement the prefeasibility studies already underway with support from a $900,000 grant from the IDB-administered Japan Trust Fund for Consultancy Services.
Depending on the results of the studies and the subsequent exploratory drilling phase, ISAGEN may build a 50-megawatt geothermal plant on one of the sites. GEF resources will also be used to analyze a suitable financial structure for the construction of the power plant, which is expected to have a demonstrative effect of Colombia’s potential to develop alternative energy resources.
Another key goal of the project is to disseminate information and knowledge about non-conventional renewable energy in Colombia. Staff from INGEOMINAS, Colombia’s geology and mining institute, and students from the National University of Colombia are participating in the technical assessment of the potential geothermal sites.
As counterpart contributions to the GEF grant for the project, ISAGEN is contributing $850,000 while the Ministry of Mines and Energy is contributing $200,000.
The IDB acts as an executing agency of the Global Environment Facility, an independent financial organization backed by 182 member countries. The GEF provides grants for projects related to biodiversity, climate change, land degradation, organic pollution, the ozone layer and international waters.
The IDB’s Energy Division is currently carrying out GEF-funded projects in nine countries in Latin America and the Caribbean involving solar, wind and hydro power, biogas, methane recovery and energy efficiency.