As part of the deal, the bank’s arm International Development Association (IDA) will offer $6m funding to the geothermal power generation project, which is expected to reduce energy costs and boost access to electricity for all citizens of the region.
Additionally, the project will support the local government to evaluate the viability of the geothermal resource in Fiale Caldera within the Lake Assal region.
Djibouti Finance and Economy minister Ilyas Moussa Dawaleh said geothermal energy can play an important role in the country’s energy policy which is to reach 100% green energy by 2020.
"All our citizens should have access to a reliable and affordable source of electricity, which is crucial for the development of the economy and the well-being of our citizens," Dawaleh added.
The project has total financing of $31m and will also be supported by the OPEC Fund for International Development (OFID), the African Development Bank through the African Development Fund and the Danish Sustainable Energy Fund for Africa.
Additionally, the Government of Djibouti will contribute $500,000 towards the geothermal power generation project.
The development of geothermal generation capacity is expected to help the country in meeting its peak demand for electricity as well as alleviate energy dependency and reduce electricity production costs by 70%.
