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Supporting the development of the geothermal sector in Dominica
Project
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Project start date
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Status
Completed
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Project end date
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Project duration
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9 years
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AFD financing amount
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8 500 000 €
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Country and region
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Location
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Dominica
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Type of financing
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Beneficiaries
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Dominican government
Since 2007, AFD has supported the development of geothermal energy in Dominica. In 2013, it mobilized European funds to provide the Dominican government with technical assistance to facilitate the launch of drilling for a new production well to supply a geothermal power plant for the domestic market.
Context
Dominica, a volcanic island in the Antilles with a population of 71,000, produces the majority of its electricity using imported fossil fuels (75% of the island’s installed capacity). The cost of electricity–approximately 0.39 USD/kWh–is among the highest in the world and currently represents an obstacle to the country’s development. Dominica’s volcanic activity and geological structure offer significant potential for producing geothermal electricity.
In 2003, several major studies funded by the Global Environment Facility (GEF), the United Nations Environment Program (UNEP), the Organization of American States (OAS) and the INTERREG III-B program funded by the EU, confirmed and quantified the potential for geothermal energy in Roseau Valley, the feasibility of an undersea transmission line with Guadeloupe and Martinique, and pre-assessed the environmental impact of this undertaking.
After 2008, a second phase began with the drilling of three exploration wells. This second phase was funded by grants from AFD, the French Facility for Global Environment (FFEM), and the EU European Development Fund (EDF).
Description
Through a new project, AFD is providing the Dominican government with funding of €8.5 million (€2 million from a Caribbean Investment Facility delegated to AFD, €6.5 million from a loan from AFD), as well as technical, legal and financial assistance. This support will contribute to a database (while also reducing the technical risks associated with the project) which will be communicated to the future contractor to facilitate the installation of an initial 10-MW geothermal plant for the local market. The parallel loan, which has been fully disbursed, supported the completion of the first phase of drilling and the construction of a production well and reinjection well.
Impacts
This investment project will transform the island’s energy model by creating a sustainable and environmentally friendly driver of growth. It will lower the cost of electricity in Dominica and increase its power generation capacity. It will also reduce diesel importation, thus reducing currency outflow.