Cluff Geothermal will benefit from a US$10 million facility secured on 17 September 2015 by Hotspur Geothermal, a related company. The facility will support Cluff’s ongoing business through to exploration drilling and allow it to maintain greater control of existing and potential projects.
The facility is not restricted to Cluff, but Cluff’s geothermal exploration license at Fantale is expected to be the main focus for as long as that project is making good progress. At Fantale, Cluff has already acquired high quality magnetotelluric (MT) data from a recent surface study, which will enable it to identify suitable drilling targets. The successful negotiation of both a Power Purchase Agreement with Ethiopia Electric Power (EEP) and an Implementation Agreement with the Federal Government of Ethiopia will then enable exploration drilling to begin.
The facility is unsecured and has been provided by Dr Alvaro Sobrinho, a 40% shareholder of Cluff Geothermal and director of both Cluff Geothermal and Hotspur Geothermal. It will be in addition to funding from the Geothermal Risk Mitigation Facility (GRMF) which has provided a non-refundable grant of US$0.9 million, recoverable against the costs of the surface study, and qualified Cluff for a further non-refundable grant of US$3.8 million, recoverable against the costs of exploration drilling at Fantale.
Cluff Geothermal’s Chief Financial Officer, Peter Dixon-Clarke, said: “Dr Sobrinho’s continued support enables Cluff to act as a true catalyst for sustainable energy solutions in Africa. The early exploration stage has always been the hardest to finance for geothermal developments, and by backing its own developments with its own equity right from the start Cluff can really kick start projects in countries such as Ethiopia and Kenya in a way that few other private geothermal developers can do.”