Njoki Kangethe
In our last piece, we explored the basics of geothermal energy, how heat trapped beneath the earth’s crust can be harnessed to generate electricity. If you missed that introduction, I’d encourage you to start here first. It sets the stage for understanding why geothermal matters and how it works in simple, non-technical terms.
Today, let’s take the conversation a step further. Now that we know geothermal is essentially earth’s own steam engine, what does it mean for Africa’s energy future? How much investment does it take? Where are the opportunities? And what risks do we need to keep in mind?
Why Geothermal Matters for Africa
Africa’s energy story is one of contrasts. On the one hand, over 600 million people still lack access to reliable electricity (IEA, 2022). On the other, the continent sits on one of the richest belts of geothermal potential anywhere in the world: the Great Rift Valley. From Ethiopia and Kenya down through Tanzania, Malawi, and even into Mozambique, tectonic movements create a natural ‘heat highway’ beneath our feet (UNEP, 2017).
Unlike solar and wind, geothermal is baseload power, it runs 24/7, rain or shine. In countries where hydro dams falter during droughts and diesel is both expensive and polluting, geothermal offers a steady, homegrown source of clean electricity. Kenya already generates more than 40% of its electricity from geothermal (World Bank, 2019). Ethiopia is following close behind.
This is why geothermal is not just another renewable option, it’s a backbone technology that can stabilize Africa’s grids and reduce dependence on fossil fuels.
Financing the Heat Beneath Our Feet
Of course, tapping into underground steam isn’t cheap. The biggest hurdle for geothermal is upfront cost. Unlike solar panels that can be rolled out relatively quickly, geothermal requires drilling wells several kilometers deep to find reliable steam reservoirs. In Kenya, drilling wells using owned rigs cost about 3.5 million US$ and about 6.5 million using hired rigs (United Nations University, 2013), sometimes with no guarantee that it will succeed.
That risk profile makes private investors hesitant. As a result, much of Africa’s geothermal development has been financed through public institutions and international lenders (Climate Policy Initiative, 2015). The World Bank, African Development Bank (AfDB), and countries like Japan have played huge roles in backing Kenya’s Olkaria fields and Ethiopia’s Corbetti project (World Bank, 2019).
But there’s a silver lining. Once the drilling phase is complete and a geothermal plant is built, operating costs are remarkably low. The steam is free, and plants can keep running for decades with proper maintenance. That means the long-term economics are solid, it’s just the early financing that remains tricky (IRENA, 2020).
Who’s Paying the Bill?
Here’s the challenge: when big loans are used to finance geothermal, questions of debt sustainability and sovereignty emerge. If the projects are structured poorly, countries risk locking themselves into decades of repayments. This mirrors what we’ve seen in other sectors, where energy megaprojects sometimes benefit foreign contractors more than local communities (IEA, 2022).
For geothermal to truly serve Africa, financing needs to be patient, fair, and transparent. Some promising approaches include:
- Risk-sharing facilities where multilateral banks absorb early drilling risks.
- Public-private partnerships that bring in private developers once a resource is proven.
- Green bonds and climate finance that tie geothermal growth to Africa’s low-carbon commitments.
If structured well, geothermal can be a model for how Africa develops infrastructure without falling into the pitfalls of unsustainable debt (AfDB, 2020).
Opportunities on the Horizon
Beyond the immediate electricity supply, geothermal offers a range of opportunities that often go under-discussed:
- Direct Use Applications: The heat can power greenhouses, fish farming, or even milk pasteurization, providing income opportunities for local communities (UNEP, 2017).
- Industrial Use: Stable, affordable power can attract manufacturing and data centers (IRENA, 2020).
- Regional Trade: With strong interconnections, geothermal-rich countries like Kenya and Ethiopia could export surplus electricity to neighbors, supporting regional integration (World Bank, 2019).
- Climate Finance Leverage: As the world pushes for decarbonization, Africa can position geothermal as part of its contribution to global climate goals, unlocking grants and concessional funding (AfDB, 2020).
These are not futuristic ideas. Already, Kenya has small pilot projects where geothermal heat supports flower farms and milk processing, e.g., Oserian Development Company in Naivasha, Kenya, uses geothermal heat for its greenhouses, and the Geothermal Development Company (GDC) uses geothermal steam to pasteurize milk at its Menengai base. (UNEP, 2017; GDC 2021). Scaling such initiatives could bring the benefits of geothermal beyond the grid into everyday livelihoods.
Risks We Must Watch
Geothermal, however, isn’t risk-free. Here are some of the challenges that must be managed carefully:
- Exploration Risk: Drilling a dry well is costly. Countries need better geological surveys and data-sharing to improve success rates (AfDB, 2020).
- Environmental Concerns: Although cleaner than fossil fuels, geothermal plants can release small amounts of gases and must manage water and land use carefully (IRENA, 2020).
- Social Impact: Projects in the Rift Valley often intersect with communities living on ancestral lands. Without proper consultation and benefit-sharing, conflicts can arise (UNEP, 2017).
- Overdependence on Donors: Relying too heavily on foreign financing risks repeating patterns of dependency. Building local technical expertise and ownership is essential (IEA, 2022).
A Model for the Continent?
So, can Kenya’s geothermal journey offer lessons for the rest of Africa? Absolutely. Kenya shows that sustained political commitment, investment in local expertise, and strategic partnerships can turn geothermal potential into real power on the grid (World Bank, 2019). Ethiopia is beginning to replicate this, and countries like Djibouti, Tanzania, and Rwanda are exploring their own fields (ThinkGeoEnergy, 2023).
Each country will need its own approach, scaling projects appropriately, diversifying financing models, and ensuring communities are at the center of planning. But the underlying lesson is clear: Africa’s geothermal belt is not just a natural resource. It’s a development opportunity.
Conclusion
Geothermal is not a silver bullet, but it’s a critical piece of Africa’s energy puzzle. By combining its 24/7 reliability with the rapid growth of solar and wind, the continent can build resilient, low-carbon power systems that work for both cities and rural areas.
As we continue this series, we’ll dive deeper into case studies, policy frameworks, and financing innovations. But for now, let’s remember: beneath Africa’s Rift Valley lies not just heat, but hope, if we choose to harness it wisely.
References
- African Development Bank (AfDB). (2020). Unlocking Africa’s Geothermal Potential. Abidjan: AfDB.
- International Energy Agency (IEA). (2022). Africa Energy Outlook 2022. Paris: IEA.
- International Renewable Energy Agency (IRENA). (2020). Renewable Energy Statistics 2020. Abu Dhabi: IRENA.
- United Nations Environment Programme (UNEP). (2017). Geothermal Energy Development in Africa: Opportunities and Challenges. Nairobi: UNEP.
- World Bank. (2019). Kenya’s Olkaria Geothermal Development: Pioneering the Power of the Earth. Washington DC: World Bank.
- ThinkGeoEnergy. (2023). Geothermal energy projects and developments in East Africa.
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