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IFC InfraVentures makes first investment IFC InfraVentures makes first investment

01 Jul 2008. Source: AltAssets.
IFC, a member of the World Bank Group, and Reykjavik Energy Invest have agreed to jointly explore and subsequently develop geothermal resources in Djibouti. This is going to be the first investment from the $100m IFC InfraVentures fund, which was established to support the development of infrastructure in the world's poorest countries. The Djibouti project is located in the geothermal area of Lake Assal in Africa.

As co-developer with REI, IFC InfraVentures will provide 35 per cent of the exploration costs of the project, including full feasibility studies and exploration drilling for the geothermal plant.

IFC InfraVentures will also work with REI to implement robust environmental and social standards and mobilise financing from other potential investors. REI and IFC InfraVentures are currently assembling a consortium of project participants to secure additional funds. IFC InfraVenture's contribution is capped at $4m.

Rashad Kaldany, director for infrastructure, IFC, said, 'This first transaction for IFC Infraventures is important to moving this innovative approach forward. A successful feasibility study for REI Djibouti, one of the first large-scale geothermal projects in the region, would have a significant impact by proving the viability of geothermal energy as a major contributor to the region's growing energy needs.'

Hjorleifur Kvaran, CEO, Reykjavik Energy Invest, added, 'We believe there is a substantial opportunity for geothermal power production in Djibouti. We are assembling a consortium of investors to support the projects and IFC is the first partner that we announce. We are very happy that the World Bank's IFC is dedicating funds for the project. This is an important step in securing financing and minimising REI's financial risk.'

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