The African Union (AU) and the Icelandic-US private developer, Reykjavik Geothermal Limited (RG), have signed an US$8m contract for drilling of two wells in the first phase of Ethiopia’s geothermal project.
The head of the Ethiopian Electric Power Corporation, Miret Debebe said that the energy produced from the Corbetti geothermal power project will be used for both local consumption and for export to neighbouring countries.
The geothermal farm which is located 200km south of the capital Addis Ababa, will be built in two phases. The US$2bn, 500MW first phase will be completed in 2018 and the second phase is expected to be finished in 2021. According to RG, the total cost of the project is US$4bn, assuming 25% equity financing and debt financing of 75%. When complete, the project will represent the largest foreign direct investment in Ethiopia.
Ethiopia is in the midst of an ambitious five-year Growth and Transformation Plan which runs until 2015. Under the plan, the government aims to increase power generation from its current level of just under 2,200 MW to 10,000 MW.
Out of this total, 9,000 MW is expected to come from hydropower, with wind contributing 890 MW, followed by geothermal at 70 MW, and solar power at just 30 MW.