De-risking Geothermal Energy Investment in East Africa

FSD Africa and UK-based Parhelion have launched a programme to de-risk early-stage geothermal energy development in Kenya and Ethiopia. The initiative focuses on creating a Geothermal Risk Transfer facility to mitigate drilling risks and a training programme to build the capacity of local African insurers to underwrite geothermal risks, thereby attracting investment and reducing reliance on international insurance markets.

• The East African Rift System has an estimated geothermal potential of 20,000MW. Within this region, Kenya has a potential of 10,000MW and currently possesses approximately 950MW of installed capacity, supporting a national goal of 100% renewable energy by 2030. Ethiopia is described as being in the early stages of geothermal generation but possessing enormous potential for green energy.
• FSD Africa and Parhelion have established a Geothermal Risk Transfer facility to address high upfront costs and the risks of drilling unviable wells or experiencing low production. This facility acts as a backstop for development finance institutions, providing assurance of repayment to encourage lending for geothermal exploration.
• A Geothermal Resource Risk Insurance Training Programme, conducted with Kenbright, aims to enable African insurers to retain premiums locally. The programme covers risk assessment, parametric insurance, and underwriting practices. Ten leading insurers have participated, including GA Insurance Limited and ICEA LION Group; GA Insurance plans to launch a geothermal risk insurance product within the next one to two years.
• While it is too early to report actual results, FSD Africa and Parhelion estimate the initiative could lead to a 500% increase in geothermal energy production in Ethiopia and a 20% increase in Kenya. Projected impacts include 5.25 million people accessing electricity, 2,600 new jobs in the energy and insurance sectors, and 515,000 metric tons of avoided CO2 emissions.

APA

FSD Africa (n.d.). De-risking Geothermal Energy Investment in East Africa. https://fsdafrica.org/wp-content/uploads/2025/05/FSD-Africa-De-risking-geothermal-nergy-investments-impact-story-04.02.24-1.pdf

Chicago

FSD Africa. De-risking Geothermal Energy Investment in East Africa. n.d. https://fsdafrica.org/wp-content/uploads/2025/05/FSD-Africa-De-risking-geothermal-nergy-investments-impact-story-04.02.24-1.pdf.

Wikipedia

{{cite report |author=FSD Africa |title=De-risking Geothermal Energy Investment in East Africa |url=https://fsdafrica.org/wp-content/uploads/2025/05/FSD-Africa-De-risking-geothermal-nergy-investments-impact-story-04.02.24-1.pdf |access-date=17 August 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{fsdafricandderisking, author = {{FSD Africa}}, title = {{De-risking Geothermal Energy Investment in East Africa}}, institution = {FSD Africa}, url = {https://fsdafrica.org/wp-content/uploads/2025/05/FSD-Africa-De-risking-geothermal-nergy-investments-impact-story-04.02.24-1.pdf}, urldate = {2026-08-17}, note = {Indexed by Climate Insights Directory} }