The privately owned Corbetti Geothermal Company has signed a power purchase agreement for 500 megawatts of electricity with Ethiopia.
The planned 1,000MW Corbetti project in the central Oromia region, estimated to cost to about $4 billion, is to be constructed in two phase within a period of eight to 10 years and is expected to one of Africa’s largest geothermal facilities on completion.
Ethiopian Electric Power Corporation (EEPCo) and Corbetti Geothermal Company, owned by Reykjavik Geothermal Ltd of Iceland, have signed a 25-year power purchase agreement for the first 500 MW.
EEPCo chief executive officer Azeb Asnake said Ethiopia is willing to connect power transmission lines to neighbouring countries to create a market in the region for the trade in electricity.
He said the geothermal generation will be carried out by Corbetti in southern Ethiopia.
The $4 billion Corbetti geothermal project has 25 per cent equity financing and 75 per cent debt financing.
Aluto Langano is the only geothermal plant in Ethiopia, generating about 7.3 MW. Expansion work at Aluto Langano to boost capacity to 70MW in two phases was launched on December 2, 2013 at a cost of over $30 million.
The expansion project of Aluto Langano is financed by the government of Japan, the World Bank and the Ethiopian government. It entails the drilling of 24 geothermal wells to a depth of 2,500 metres.
Ethiopia wants to have installed generation capacity of 37,000 MW by 2037, and thus become the major exporter of electricity in the region.
Edward Njoroge, chairman of the Corbetti Geothermal Power project, said Ethiopia has taken major steps to exploit its geothermal resources. “Renewable energy is clean. We are happy to be part of the effort,” he said.