Developer of Ethiopian geothermal plant targeting financial close in 2019

28th September 2018 By: John Muchira - Creamer Media Correspondent

A private company implementing a $2-billion geothermal power plant in Ethiopia is hoping to attain financial close next year to enable it to deliver the first 50 MW by 2021.

Tulu Moye Geothermal Operations (TMGO) says negotiations are at an advanced stage with potential financiers of the 520 MW Tulu Moye geothermal project, which involves the exploration, design, development, financing, construction, operation and maintenance of a power plant located in the Omoria region, about 100 km south-east of Addis Ababa, the country's capital.

TMGO CEO Darrell Boyd says the company is targeting a delivery date of 2021 for Phase 1 of the project, which involves an installed capacity of 50 MW. The first phase is projected to cost $250-million.

TMGO is owned by Meridiam, a leading global infrastructure fund manager, and Reykjavik Geothermal, a specialised developer that has been present in Ethiopia for a long time.

TMGO has submitted an application to the Multilateral Investment Guarantee Agency, a member of the World Bank, for a guarantee of up to 15 years for its investment in the project. The guarantee is for risks like breach of contract, expropriation and war and civil disturbance.

Meanwhile, TMGO has also secured a $1.1-million grant from the US Trade and Development Agency (USTDA) to coordinate a feasibility study supporting the development of Phase I of the project. The study will be conducted by US firm Delphos International.

“The USTDA is pleased to support this important project, which will foster energy diversification and improve access to affordable and reliable electricity in Ethiopia,” says USTDA director of Congressional and public affairs Thomas R Hardy.

He adds that the grant supports the goals of the US government's Power Africa initiative, which seeks to promote economic growth and investment in Africa through investments in the energy sector.

The Tulu Moye project is intended to provide Ethiopia with adequate, reliable and affordable energy to power its manufacturing sector and other industries.

In December last year, Ethiopian Electric Power signed implementation agreements and power purchase agreements for the Tulu Moye project and the Corbetti geothermal project.

The two projects involve the construction of power plants with a combined installed capacity of 1 000 MW at an estimated cost of $4-billion.

The entire Tulu Moye project will be built over eight years.