NEWSLETTER 44 / 2 0 1 0N o r d i c D e v e l o p m e n t F u n d

Olkaria II Geothermal Power Plant, Kenya

Continue to the next page >

Geothermal energy makes a clean and stable energy sourceGeothermal energy is aclean source of electricity,heat and cooling. Amidst climate change concerns, in-terest in this energy sourcehas increased considerablyduring recent years.

This flexibility in geothermalenergy helps the energy sec-tor adapt to climate change.The CO2 emissions from geo-thermal applications aresmall compared to fossil fuelsand new technologies promisefurther reductions.

”Contrary to other renew-able energy sources like solar,wind and hydro, the output ofa geothermal plant is stableregardless of weather condi-tions or the time of the day,”says Hannu Eerola, CountryProgram Manager at NDF.

Geothermal energy is thenatural heat generated andstored in the earth’s core,mantle and crust. The heat istransferred towards the sur-face mostly by conduction.The heat is accessible at vari-ous depths and temperaturesdepending on the geologicalconditions.

The most common sourcesfor electricity generation arehigh-temperature fields con-nected to volcanoes and mag-matic activity.

Usually the electricity isgenerated by using steamfrom high-temperature fieldsusing conventional steam tur-bines. A geothermal produc-tion well is typically two tothree km deep and producessteam or hot water. After theheat has been captured, the

water is reinjected into theground, making geothermalenergy both renewable andsustainable.

Regions with volcanic ac-tivities are the most suitableplaces for generating electric-ity using geothermal energy.Geothermal fields are com-mon on earth crust plateboundaries. New Zealand, Indonesia, the Philippines,Japan, the East AfricanRift system, Alaska, Cali-fornia, Mexico, CentralAmerica, the Andean regionand Iceland are all attached toplate boundaries with intensegeothermal activity.

Photo: Juhani Annanpalo

N D F N e w s l e t t e r 4 / 2 0 1 0

NDF to assist Vietnam in responding to climate change

Many of NDF’s partnercountries are located in theseareas of high-temperaturegeothermal energy. NDF iscurrently planning to sup-port geothermal training activities in Central Americatogether with the Inter-American DevelopmentBank (IDB) and the UnitedNations University–Geother-mal Training Programme(UNU-GTP). Similar activi-ties could be considered inEast Africa as well.

”By supporting capacitybuilding activities in geo-thermal energy, NDF canpromote the use of clean energy and in this way miti-gate climate change,” saysHannu Eerola.

NDF may also consider fi-nancing for small-scale test-ing and piloting activities aswell as technical assistance.I Iceland has been a pio-neer country in harnessing

geothermal resources andhas developed special ex-pertise in this field.

UNU-GTP was estab-lished in Reykjavik in1978 with the National Energy Authority ofIceland as host institution.Since then, more than 400scientists and engineersfrom 44 countries havecompleted geothermaltraining courses of sixmonths.T The University of Ice-land has offered an MScprogramme in geothermalsciences since 2000 and aPhD programme since2008.“ “The possibilities in geo-thermal power generationare vastly underestimated.Too little has been done toassist developing countriesto harness this reliable en-ergy source. Many coun-tries in the African Rift

Valley, in South-East Asiaand in Latin Americacould achieve a clean en-ergy transformation. Withfinance and expertise wecould transfer renewabletechnologies to enable de-veloping countries to con-tinue growing — on asustainable and renewablebasis," says Iceland´s Foreign Minister ÖssurSkarphéðinsson.

Geothermal resources around the world

• Currently utilised in 70 countries• Electricity is produced in 24 countries• Total electricity generating capacity is more than

10 000 MW• Up to 8 % of the world’s total electricity needs may

be covered• Even greater potential for uses other than electricity

generation, e.g. space heating • Heat pump technology allows for heating and cooling

practically everywhere

NDF will finance a projectin Vietnam with the objec-tive of increasing the capa-city to design and implementclimate change responsemeasures.

”Vietnam is one of themost vulnerable countriesto climate change, amongthe top ten countries to beaffected by global warming.At the same time, rapid eco-nomic growth threatens toincrease CO2 emissions. Itis against this backgroundthat the government ofVietnam has made tacklingthese threats a key prior-ity,” says NDF’s CountryProgram Manager Martina Jägerhorn.

In December 2008, theGovernment of Vietnam approved the National Tar-get Program (NTP) as a res-ponse to the climate changethreats. The NTP requiresaction plans for differentsectors and provinces, butthere is not a comprehen-sive approach or a set ofguidelines for designing

these action plans. ”That is why the primary

goal of the project is to assist the government di-rectly in setting theseguidelines in certain keysectors that have not yetreceived any support,” says Jägerhorn.

The key sectors aretransport, energy, indus-tries and urban planning.

The main objective of theproject is to develop andput into operation detailedaction plans and to streng-then institutions for plan-ning and design of climatechange projects. The pro-ject will also aim at support-ing community awarenesscampaigns and designingclimate change pilot projects.

The project will providetechnical assistance to de-velop and implement thedetailed action plans insupport of the NationalTarget Program. The tech-nical assistance will supportthe Ministry of Industryand Trade, the Ministry of

Transport, the Thanh Hoaprovince and two cities,Da Nang and Ho Chi Minh,in developing plans thatcan serve as examples forother sectors and munici-palities.

The Ministry of Trans-port will be the ExecutingAgency for the technicalassistance. The Ministryof Transport and the peo-ple’s committees of ThanhHoa, Ho Chi Minh City andDa Nang will function asimplementing agenciesunder the overall coordi-nation of the ExecutingAgency.

An international con-sulting firm together withlocal consultants will pro-vide the consulting services.

The total project fund-ing amounts to EUR 2.41million. The NDF grant isEUR 2.21 million. TheAsian Development Bankwill act as partner agency.The project period is twoyears starting from Octo-ber 2010.

N D F N e w s l e t t e r 4 / 2 0 1 0P

hoto

: Juh

ani A

nnan

pal

o

The Nordic Climate Facility(NCF) has been promotingtechnology and know-howpartnerships in climatechange since October 2009.The main objective of NCF is to ease the transfer of cli-mate change related technol-ogy, knowledge, know-howand innovative ideas fromthe Nordic countries to low-income countries. In thisway, low-income countrieswill increase their capacityto mitigate and adapt to climate change.

The first call for propo-sals created considerable in-terest both among applicantsand recipient countries. Al-though the concrete resultsof the projects of the firstcall for proposals are yet tobe implemented, the experi-ences from the proposedprojects as well as theprocess have been positive.That is why a second call forproposals will be launchedin October 2010.

”There seems to be a sig-nificant demand for thistype of seed financing,” saysNDF’s Country ProgramManager Martina Jägerhorn.

While the first call forproposals was directed to-wards water resources and

energy efficiency, the focusof the second call will be onurban adaptation to climatechange and renewable energy.

Originally planned tofocus on biomass energy,the second call has beenbroadened to include othertypes of renewable energy.This change allows for theinclusion of energy sourcesthat may not have separatecalls, such as geothermalenergy.

Economic growth and social progress are the keydrivers behind the rapid riseof demand for energy in developing countries.

”If there are no conven-ient or affordable alterna-tives available, chances arethat these countries willturn to fossil fuels. Most de-veloping countries have alot of renewable energy re-sources such as solar andwind. If these countries areable to develop these energysources, they can reducetheir dependence on fossilfuels,” says Jägerhorn.

It is expected that manyof the competitive proposalsfor renewable energy will beimplemented in rural areas.That is why the proposalsfor adaptation will support

urban populations to tackleclimate change challenges.

Over 90 percent of urbangrowth is occurring in thedeveloping world. This rapidurbanisation, together withclimate change impacts,risks undermining effortsto achieve and maintainsustainable development.

Possible projects onurban adaptation to cli-mate change may includeplanning and implement-ing management informa-tion systems. These systemscan increase nature disas-ter preparedness throughweather-monitoring andclimate-proofing of infra-structure such as storm-drainage systems.

NCF is administered inpartnership with theNordic Environment Fi-nance Corporation NEFCO.The first call for proposalswas granted a total of EUR6 million. The second callof proposals has also beengranted financing of up toEUR 6 million, making atotal grant funding of EUR12 million available for theNordic Climate Facility.

More information will bepublished on www.ndf.fiand www. nefco.org.

Nordic Climate Facility —a second call for proposalsto be launched

Evaluation of solar energyprojects

The Nordic DevelopmentFund (NDF) has provided fi-nancing to the energy sectorin more than 25 countriesduring the past two decades.While much of this supportwent to traditional energysolutions, NDF credits havealso financed a number ofrenewable energy solutionssuch as solar energy.

An external evaluationwas launched in May 2010to assess results and capturelessons learned from solarenergy projects in Hondurasand Senegal. The main find-ings revealed that the provi-sion of solar energy systemswas highly relevant to thecommunities since they areoutside of the national elec-trical grid; furthermore, dueto their remote location thecommunities will remainwithout electricity for theforeseeable future. In Hon-duras, the solar energy sys-tems were exclusively usedfor electricity in schoolswhile those in Senegal wereused for electrical waterpumps.

The delivery of the solarenergy systems experienceddelays both in Honduras andSenegal. The training of re-cipients seems not to havebeen optimal, which in somecases led to problems withoperation and maintenance.A main lesson learned isthat future solar energyprojects need to place moreemphasis on local ownershipand long-term sustainability.

The impacts of the solarenergy systems in the com-munities in Honduras andSenegal were found to begenerally positive. In thecase of Honduras, the ar-rival of solar energy meansthat many schools now bene-fit from other national pro-grams as they have computersand televisions available inclassrooms. One teachercommented:

“It is remarkable to seehow children, whose parentscannot read or write, noware using the internet.”

The Nordic Development Fund (NDF) provides grant financing for climatechange interventions in low-income developing countries. NDF is the joint development finance institution of the Nordic countries—Denmark, Finland, Iceland, Norway and Sweden—and finances projects in cooperation with otherdevelopment institutions.

GRANT FINANCING FOR CLIMATE CHANGEPROJECTS IN LOW-INCOME COUNTRIES

NORDIC DEVELOPMENT FUND, P.O. Box 185, FIN-00171 Helsinki, Finland (Visiting address: Fabianinkatu 34), Tel: +358 10 618 002, Fax: +358 9 622 1491, E-mail: info.ndf@ndf.fi, www.ndf.fi

Nordic Development Fund

NDF grants EUR 3.5 millionto help indigenous peoplesand Afro-descendants inHonduras tackle climatechange challenges. The over-all objective is to increasethe capacity of these peoplesto respond to climate change,to secure civil society moni-toring of obligations relatedto climate change and toprovide renewable energy solutions to local communities.

Honduras is one of themost vulnerable countries to climate change in CentralAmerica. Rising tempera-tures and changes in rainpatterns will likely worsenthis situation with more in-tense weather conditions andnatural disasters, such

NDF Newsletter presents NDF's operations. The newsletter is published as needed. Layout Kubik, print Erweko Oy, pictures Juhani Annanpalo, Jorge Travieso, Lehtikuva and Dreamstime.

N D F N e w s l e t t e r 4 / 2 0 1 0

as hurricanes, floods anddrought.

Between seven and twelvepercent of the populationin Honduras consists of in-digenous peoples and Afro-descendants. Furthermore,the Human DevelopmentIndicators for these groupsare significantly lowercompared to the rest of thepopulation. These commu-nities are highly dependenton local natural resourcesfor their livelihood and areconsequently very vulnera-ble to climate change.

”The traditional know-ledge developed over gen-erations is no longer suffi-cient to tackle the seasonalvariations due to climate

change. That is why there isa need for combining tradi-tional knowledge with up-to-date information to developmethods and tools for thesecommunities to adapt to cli-mate change,” says NDF’sCountry Program ManagerAage Jørgensen.

The project will supportclimate change courses forcommunity leaders, commu-nity adaptation activities, in-tegration of climate changeinto curriculum and scholar-ships for indigenous stu-dents. The project will alsoprovide support to civil soci-ety monitoring, informationand advocacy regarding na-tional climate change obliga-tions and priorities.

Support to capacity development and renewable energy for Indigenous Peoples and Afro-descendants in Honduras

Another component willsupport renewable energy solutions to indigenous andAfro-descendant communitieswithout electricity. The re-newable energy will be bothused to process and conserveagricultural products and forindividual household lighting.

The project will link upwith the ongoing IndigenousPeoples Development Pro-gram financed by the Inter-American Development Bank.

The total Project fundingis EUR 12.35 million, ofwhich NDF will grant EUR3.5 million. The project pe-riod is four years startingfrom January 2011.