A $224 million loan from the Japanese government will be used to build the Borinquen I geothermal plant, which will start operating in 2023 with an installed capacity of 55 MW.
The agreement of understanding signed between the governments of Costa Rica and Japan includes the construction program, the investment scheme and procurement plan, among other technical, legal, environmental and financial aspects.
Insurance coverage, tax incentives and drilling costs shared between private businesses and governments are some of the proposals put forward for exploiting geothermal potential in Central America.
A global study by the World Bank analyzes the reasons why it has not been possible to take full advantage of geothermal energy in Latin America, highlighting countries such as Costa Rica, Nicaragua, Argentina and Chile, whose potential to generate energy through this renewable source has still not been fully exploited, mainly because of the high risks involved in geothermal projects in their early stages.
With a loan from the IDB it is hoped that the state power geothermal projects Pailas Borinquen I and II will be completed and improvements made to the transfer line from Guanacaste and its connection to Central America.
The plan by the Instituto Costarricense de Electricidad (ICE) is to invest the proceeds of the loan between 2017 and 2025, starting with projects under development in Guanacaste, Borinquen Pailas I and II.
The Instituto Costarricense de Electricidad within the framework of the Pailas II geothermal project is putting out to tender design of the plant, with a capacity of 55MW and supply of the main materials and electro-generating equipment.
The state run power company has begun development of a management plan and the drilling of wells in the Pailas II project, the first of three plants to be developed in the northern part of the country.
With funding from the Japanese government and approved by the Legislative Assembly the Instituto Costarricense de Electricidad (ICE) will start to build three geothermal projects; Pailas II, Borinquen I and II in the province of Guanacaste.
With the approval of the international loan the Instituto Costarricense de Electricidad will be able to access funds to build three plants of 55 MW each.
The approval given by the Legislature in a second debate for a $619 million loan is part of the "Cooperation Agreement for a sector loan for the development of geothermal energy in Guanacaste", "... of which $644 million comes from a loan from the Japanese International Cooperation Agency (JICA) and $70 million from the European Bank, with the remaining resources to be provided by the ICE. "
Feasibility studies are being carried out, funded by the International Cooperation Agency of Japan.
Feasibility studies for geothermal projects Pailas II and Borinquen will be financed by the Japanese government, under an agreement of understanding between the Costa Rican Electricity Institute (ICE) and the International Cooperation Agency of Japan (JICA), as a result of an official visit by president Laura Chinchilla to the Asian country.
Costa Rica spent in 2010 $ 164 million in oil to generate electricity, while it wastes 1,000 MW of geothermal potential.
According to current legal framework and planning, the Instituto Costarricense de Electricidad expects to generate 4,018 megawatts by the year 2016, of which only 35 MW will come from geothermal sources; it represents only 2% of the total. The 35 MW will be contributed by the Pailas Geothermal Power Plant, expected to enter production in 2012.
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