The project is located within the Asal Rift area in the Republic of Djibouti in East Africa. The African Rift Valley intersects six countries – Kenya, Ethiopia, Djibouti, Uganda, Tanzania, and Eritrea: The valley is an area of massive geothermal potential (some estimates place it at 7,000 MW) and REI´s project in Djibouti is the first project undertaken on the rift. Several other projects are under consideration.

A contract granting a temporary exclusive license for geothermal utilization in the Asal Rift area between the Government of the Republic of Djibouti and Reykjavík Energy was signed on 29 February 2007. An exploration permit was issued by the Djibouti Minister of Energy and Natural Resources on May 23rd 2007. The concession area covers 750 km2.