(SeeNews) - Mar 12, 2014 - Reykjavik Geothermal, the Iceland-based company developing the up to 1,000-MW Corbetti geothermal project in Ethiopia, aims to start drilling works by July, Bloomberg said today, citing a company manager.
Gunnar Orn Gunnarsson, chief operating officer, told the business news provider that Reykjavik Geothermal expected to secure between USD 40 million (EUR 29m) and USD 80 million in financing for the project from three or four investors this month. The funds will cover drilling expenses for up to five wells which are expected to bring the first 20 MW of power generation capacity. Later the Icelandic company will seek to obtain USD 500 million in additional financing from equity partners, Gunnarsson said, as cited by Bloomberg.
In October, Reykjavik Geothermal and the Ethiopian government signed an official deal under which the company will build the geothermal complex in the African country’s Rift Valley. The project’s first 500-MW phase, to be operational by 2020, is calling for an investment of some USD 2 billion.
Gunnarsson told Bloomberg that installing 500 MW of geothermal plants will boost Ethiopia’s power capacity by 25%. Once the plant up and running, Reykjavik Geothermal will be selling the output to Ethiopian Electric Power Corp (EEPCo) for a term of over 25 years under a power purchase agreement.
The Corbetti geothermal project is part of US President Barack Obama’s USD-7-billion initiative to double electricity access in Ethiopia, Ghana, Kenya, Liberia, Nigeria and Tanzania.
(USD 1 = EUR 0.721)