Iceland has signed on with the World Bank to play a major role in a major geothermal energy project targeting East Africa, its foreign affairs minister says.

Ossur Skarpheoinsson said in Reykjavik Friday his country will be one of the lead partners by implementing an ambitious World Bank geothermal development plan long East Africa's 3,700-mile Great Rift Valley that would cover 13 energy-poor nations.

Also assisting in the potentially $500 million geothermal expansion project will be the five-nation Nordic Development Fund, Skarpheoinsson said.

Taking part in a Friday signing ceremony marking the occasion were Pasi Hellman, managing director of the Nordic Development Fund; Iceland International Development Agency chief Engilbert Gudmundsson; and Rohit Khanna of the World Bank.

The first part of the effort will include $13 million to be split between the Icelandic International Development Agency and the Nordic fund over the next two years to co-finance a first phase -- test drilling in the Great Rift Valley states of Djibouti, Ethiopia, Uganda, Eritrea, Kenya, South Sudan, Tanzania, Malawi, Mozambique, Burundi, Rwanda, Zambia and Somalia.

"The collaboration between Iceland and the World Bank is the largest initiative so far for promoting the utilization of geothermal energy in developing countries, and Iceland will effectively become the Bank's key partner in this field," an official release said.

Iceland has long been the world's leader in the tapping and development of geothermal energy, taking advantage of its position on the volcanic rift between the Eurasian and North American plates to heat more than 90 percent of its buildings at low cost in a climate-friendly way.

The World Bank says Africa's vast Rift Valley is also an attractive option where geothermal energy is available. It estimates 14,000 megawatts of geothermal potential exist along the valley, enough to deliver power to 150 million people.

If developed properly, the renewable energy could deliver at least one-quarter of the energy the East African countries will need by 2030, backers say.

The new plan seeks to target regions of high potential and finance the test drilling phase as a way to catalyze private investment in all other stages of the geothermal "value chain."

Due to high upfront exploratory drilling costs, however, only 11 gigawatts of geothermal capacity had been developed globally by 2011, representing just 0.3 percent of the world's total power generation. Iceland is seeking to the help jumpstart the ambitious Great Rift Valley project by providing start-up financial aid and development expertise, Skarpheoinsson indicated.

"The drilling is the most costly part of the exploration and the primary hindrance to the utilization of geothermal energy," the ministry statement said. "However, if the drilling yields positive results, it will be possible to harness geothermal energy for electricity production and utilize it to further economic development, with the active participation of the private sector."

Kenya has already developed 190 megawatts of geothermal power through a 1980s World Bank-financed project at the Rift Valley site of Olkaria, and last year obtained financing to expand its capacity by an additional 280 megawatts.

More geothermal power could help reduce drought-prone Kenya's reliance on spotty hydropower, which has proven a hindrance to its business and industrial development.

Kenya's 1,473-megawatt power mix now consists of 51 percent hydropower and 13 percent geothermal.