Republic of Djibouti

Electricity Generation Using Geothermal Energy
Loan No: 652 Interest Rate: 2.0 %
Beneficiary: Djiboutian Establishment for the Development of Geothermal Energy Grace Period: 7 years
Project Cost: KD 17.2 million Maturity: 30 years
Amount of Loan: KD 9.0 million Repayment: 47 semi-annual installments
Date of Board Approval: 2018-02-19 First Installment: 7 years following the first disbursement
Date of Loan Agreement: 2018-04-17 Date of Loan Effectiveness: 2018-10-04

Objectives:

The project aims at satisfying part of the demand for electrical energy in Djibouti, without using imported fossil fuel. This will be accomplished through the construction of a steam power generating station that uses geothermal energy available at the Lake “Assal” area, and connecting it to the electrical transmission grid. The project represents the first stage of an ambitious program by the Djiboutian Government to utilize the inherent geothermal resources in the country, and its success will open the door for the participation of the private sector in the subsequent stages of the program.

Description:

The project, which will be constructed in the “Galla Kouma” area, 120 km west of the capital, and is expected to be completed by the end of 2022, consists of the following main components:

  1. Steam Production Facilities:This includes preliminary preparations, such as the construction of the road leading to the project site, laying of water pipes, the drilling of 10 wells at depths ranging between 600 and 1000 m, the supply and installation of pipes needed to transfer the spent water from the condenser and injection pumps and their accessories, along with the supply, installation and testing of the equipment necessary for the separation of water from steam.
  2. Power Generation Facilities:This includes the supply, installation and testing of 3 power generating units, each rated at 5 MW, the necessary equipment to connect the units to the power grid, the necessary spare parts and all civil works, along with measurement and control equipment.
  3. Interconnection Works:This includes the construction of a 6 km overhead line to connect the power generating station with the 230 kV transmission network.
  4. Consultancy Services:This includes consultancy services needed for the preparation of tender documents, assistance in bid analysis, project supervision and equipment witness testing.
  5. Institutional Support:This includes reinforcing the capabilities of the Djiboutian Establishment through conducting training workshops for its technical staff, and providing for them the necessary computer equipment and programs.

Financing:

The Arab Fund’s loan covers about 52% of the total project cost. The Kuwait Fund for Arab Economic Development contributes to the financing of the project with a loan of KD 8 million (about 47%). The Government of Djibouti will cover the remaining cost of the project and any additional cost that may arise.