Preparing Feasibility Studies for the Financing of Geothermal Projects : An Overview of Best Practices
This document offers guidelines for the preparation of feasibility studies for geothermal power projects in accordance with best industry practices. A geothermal feasibility study is a document, prepared by the project developer, that collects and...
| Main Author: | |
|---|---|
| Format: | Technical Paper |
| Language: | English |
| Published: |
World Bank, Washington, DC
2021
|
| Subjects: | |
| Online Access: | http://documents.worldbank.org/curated/en/733791626931398765/Preparing-Feasibility-Studies-for-the-Financing-of-Geothermal-Projects-An-Overview-of-Best-Practices http://hdl.handle.net/10986/36016 |
| Summary: | This document offers guidelines for the
preparation of feasibility studies for geothermal power
projects in accordance with best industry practices. A
geothermal feasibility study is a document, prepared by the
project developer, that collects and presents information
necessary to determine the technical and financial viability
of a geothermal energy project and its compliance with
environmental and social safeguards. In a broad sense, a
feasibility study is a living document that evolves over the
course of the project preparation phase. Such studies may
also have specific purposes, such as to guide the internal
business decisions of a project’s owners or to demonstrate
the economic viability of a project and its alignment with
the country´s energy strategy to public stakeholders. The
guidelines presented here refer, specifically, to
feasibility studies prepared for the purpose of securing
financing, both debt and equity. A project developer
prepares a feasibility study using reliable data so that
financiers can assess the risks associated with a project. A
feasibility study should identify the main risks and
describe how they will be managed. A necessary condition for
receiving funding is that financiers can assess project
risks and their magnitude and whether these are in a range
they are willing to accept. The guidelines offered in this
document have two purposes. The first is to help project
developers understand the required content and structure of
a feasibility study. The second is to suggest how financing
entities may assess whether a feasibility study is of
adequate quality and scope. The topics addressed in a
feasibility study for any power generation project are quite
similar irrespective of the energy conversion technology.
However, several aspects of geothermal projects set them
apart from other power generation projects. For example,
geothermal projects need significant investments in drilling
relatively early in the project lifetime to reduce resource
uncertainty. Even though the focus here is on geothermal
projects for electricity production, most of the
recommendations presented are equally valid for direct-use
geothermal projects. |
|---|