The World Bank will allocate a US$8.55 million grant for the Geothermal Exploratory Drilling Project (GEDP) for Armenia.

The WB Yerevan Office reports that the grant was approved by the Executive Board of Directors of the World Bank.

The new project is to confirm whether the geothermal resource at the Karkar field is suitable for power generation and, if confirmed, to involve the private sector in the development of a geothermal power plant.

The objective of the Armenian government is to construct a geothermal power plant at the Karkar site in Sjunik region upon the confirmation of the availability of the resource.

Unlike other renewable energy technologies, such as wind, solar, and hydro, it is not possible to validate the geothermal resource with sufficient confidence for commercial development without performing exploratory drillings at depth to assess specific parameters of the geothermal field.

“By investing in exploration that can lead to the first commercial project, we can help build domestic capacity for the development of additional geothermal resources at other prospective sites. The total potential for geothermal power in Armenia is currently estimated at around 150 megawatt,” said Laura E. Bailey, World Bank Country Manager for Armenia.

The government will use Scaling-up Renewable Energy Program (SREP) resources for Stage 1 of the Karkar geothermal project to carry out the exploratory drilling and, if the resource is confirmed, to assess the feasibility of a geothermal power plant at Karkar and support involvement of the private sector for the full development of the geothermal power project.

Stage 2 of the Karkar project would be the construction of a geothermal power plant. The early-stage analyses suggested that a 28 MW geothermal power plant with a total estimated cost of US$90-100 million could potentially be constructed at the site. The potential geothermal power plant could be developed with a mix of public and private capital. In addition.

The WB notes that the development of geothermal power would contribute to the reduction of greenhouse gas emissions.