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New finance models
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WG 3: Geothermal projects

WG3 research activities cover areas of financial risk management instruments for geothermal energy development projects as follow:

  1. Identifying, defining and characterizing various risks associated with geothermal energy development for each phase from testing to operation.
  2. Assessment of the magnitude of each risk arising and its impact on the project's financial viability in generic term to illustrate the nature of geothermal energy development and the estimated cost of various risk management instruments currently adopted.
  3. Highlighting the reservoir-related risks, conducting a survey of the geothermal risk management and mitigation instruments which have been utilized in several countries including France, Germany, Iceland, Italy, U.S. and Africa. Particular attention will be placed on the type of risk covered, coverage ratio, triggering mechanism, risk parameters, quantification of parameters, risk premium, application and processing procedures, depth and extent of commercial and technical due diligence work required, funding source (public subsidy or market-based funding), payment performance record, design of legal contract, etc. Supporting documents (program brochure, application form, term sheet, model contract, and other legal documents) will be collected as extensively as possible.
  4. Reviewing and assessing each existing instrument in terms of its strengths and weakness, if necessary, through interviews of the providers, and drawing key lessons and offering recommendations for further development of these instruments based on both public sector and private sector resources.

Publications and reports

Working Group 3 Final Study Report: Financial Risk Management Instruments for Geothermal Projects (PDF - 1,22 MB)