A Risk Mitigation Framework for Community-Based Financing in Geothermal

Abstract

As part of the Horizon 2020 project CROWDTHERMAL, the opportunities of different alternative finance strategies – like crowdfunding – for geothermal projects were assessed along with their potential risks and possible mitigation measures. Recommendations were formulated for a novel Risk Mitigation Framework that can complement alternative financing solutions for deep geothermal projects throughout Europe. A support mechanism is proposed that addresses several of the main barriers to geothermal market development. It can reduce the amount of risk capital required by project developers and can help more projects become economically feasible. At the same time, it can mitigate the financial risk for community investors and broaden the applicability of participatory finance for geothermal project funding. An economic analysis was carried out confirming and quantifying these effects.

Keywords

• deep geothermal
• alternative finance
• crowdfunding
• exploration risk
• risk mitigation
• crowdthermal project