December 21 (Renewables Now) - Ethiopian Electric Power (EEP) has inked power purchase agreements (PPA) with the developers of two 500-MW geothermal projects in Great Rift Valley that require a total investment of USD 4 billion (EUR 3.37bn).
Each of Corbetti Geothermal Plc and Tulu Moye have signed offtake deals for their projects and have secured concessions for a 25-year term, after which the two plants will be transferred to the government.
Corbetti is an Ethiopian project company sponsored by Reykjavik Geothermal, Iceland Drilling Co, the Berkeley Energy-managed African Renewable Energy Fund and InfraCo Africa. Ethiopian mining entrepreneur Nejib Biya initiated the project in 2009, with Reykjavik Geothermal joining in 2011.
The scheme will be developed in multiple phases. The first one will be wholly equity funded and will involve drilling up six exploratory wells and constructing a small power plant at the project site in Ethiopia’s Oromia region. Corbetti expects to begin drilling the first production wells next year.
In the second phase the developer plans to raise senior debt to drill an additional nine to 13 wells, and to build a 50-MW commercial-scale power plant. If successful, the full project of up to 520 MW will be realised, mobilising over USD 2 billion in foreign direct investment over the next eight to ten years.
The project is backed by the US Power Africa programme, the African Development Bank (AFDb) and the UK government. The Geothermal Risk Mitigation Facility (GRMF) has been instrumental in bridging the funding gap for the project, Corbetti says.
Both the Corbetti and Tulu Moye projects should finalise construction in eight years. Corbetti is seen to feed first power into Ethiopia’s national grid in late 2019 or early 2020. It will be the first privately financed geothermal independent power producer (IPP) in the country and the second in sub-Saharan Africa.
(USD 1.0 = EUR 0.842)