Ethiopia signs US$4 billion deal for geothermal farm

geothermalThe government of Ethiopia has signed a US$4bn contract with Iceland’s Reykjavik Geothermal to develop a 1,000MW geothermal farm in the African nation

According to a statement by the Ethiopian Ministry of Foreign Affairs, the geothermal farm project, located 200 km south of Addis Ababa, would be completed in two phases, with 500MW of power being generated by each stage.

The first phase of the project would be completed by 2018, while construction of the second phase would finish by 2021, Reykjavik Geothermal said.

According to the Ministry of Foreign Affairs, the geothermal project would become the first of its kind in Ethiopia and would become the largest of its kind in Africa.

Reykjavik Geothermal chief executive officer Gudmundur Thoroddsson said that three quarters of the project would be funded by the Icelandic energy firm, while the remaining 25 per cent would be financed through external resources, with Thoroddsson adding that “US$40mn of investment has already been secured”.

The geothermal project is part of the Power Africa initiative which focuses on the development of the Rift Valley’s geothermal potential. The initiative aims to have the sub-Saharan African region producing more than 10,000MW of clean energy in the long term.

The Ethiopian Electric Power Corporation (EEPCO) has said that it would buy electric energy generated through this project for the at least a quarter of a century after it becomes operational.

The electricity generated through this project would be used for domestic consumption and for exports to neighbouring markets, according to the Ministry of Foreign Affairs.

EEPCO chief executive officer Miret Debebe said, “Through this project Ethiopia’s trade with neighbouring countries would increase significantly in the near-term.”

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