COMOROS PURSUING GEOTHERMAL ENERGY

UNCLAS ANTANANARIVO 000114

SENSITIVE
SIPDIS

DEPT FOR AF/E AND AF/FO
DEPT FOR OES ACTING A/S HARNISH
DEPT DOR OES DAS MIOTKE AND DAS REIFSNYDER
ADDIS FOR REO KBAUMAN

E.O. 12958: N/A
TAGS: ECON EINV EAID PGOV CN
SUBJECT: COMOROS PURSUING GEOTHERMAL ENERGY


1. SUMMARY: The Union of the Comoros Government (GOC) is actively
pursuing geothermal energy options to tap into volcanic Mount
Karthala's heat on the main island of Grande Comore. Given the high
cost and unreliability of the MAMWE electric utility, the geothermal
alternative has the potential to address energy needs to allow
economic development, as well as political stability and security.
END SUMMARY.


2. Since the Embassy and Regional Environment Officer based at
Embassy Addis brought U.S.-based Geothermal Development Associates
(GDA) and the GOC together in 2008, they have begun negotiating a
Memorandum of Understanding and explored financing options with the
Kuwait Fund, German Government, International Finance Corporation
(IFC),and private investors. Comoran Vice President Idi Nadhoim is
the champion of the project, in weekly contact with Reno-based GDA
and seeking funds for feasibility. VP Idi brought Kenyan geothermal
experts from KenGen to Grande Comore for initial studies in 2008; he
also attended the ArGeo Conference in Entebbe.


3. A GDA representative spent a week in Moroni in November, 2008,
at VP Idi's invitation, to have technical talks with the MAMWE
utility, meet KenGen to discuss their findings, and review existing
data. A thorough feasibility study will cost between USD
500-900,000 to confirm Mount Karthala's geothermal potential. An
IFC official recently came to begin work on privatization plans for
both the state petroleum and telecommunications company; the GOC
reportedly asked for assistance privatizing the MAMWE utility.
Given its dated and dilapidated generators, inadequate billing and
accounting, debts, and overall poor performance, the utility
requires a complete restructuring in order to function. VP Idi told
Comoros Officer he wants the GOC and IFC to pursue geothermal
options in the context of privatizing and restructuring the power
utility.


4. COMMENT: There is a critical shortage of economic opportunity in
the Comoros. Tens of millions of dollars from the diaspora in
France prevent acute hardship and humanitarian disaster. These
remittances finance imported goods and a small group of traders.
The public sector is by far the biggest formal employer with some
15,000 civil servants, though they are only sporadically paid.
Commodity exports in ylang-ylang, vanilla, and cloves employee few
Comorans and earn limited foreign exchange. High-potential tourism
and fishing sectors remain undeveloped for lack or investment and
reliable energy. Thousands of young Comorans flee the country every
year seeking opportunity anywhere else in the world they can get to.
Without cheap, reliable geothermal energy, the Comoros will likely
remain impoverished, underdeveloped, and unstable. END COMMENT.

MARQUARDT