Ethiopia’s first independent geothermal power plant project secures funding
The East African 50 MW Tulu Moyo project has gained expanded funding from the CTF.
The African Development Bank has given the nod to a Trust Fund Committee of the Clean Technology Fund (CTF) choice to extend a $10 million concessional senior loan for a Ethiopian geothermal power plant.
The CTF is one of two funds from within the Climate Investment Funds (CIF).
The 50 MW Tulu Moyo geothermal power plant project is being viewed as a critical step forward for Ethiopia toward its goal of developing and using sustainable and reliable renewable energy sources to support its economy, businesses and its people.
The investment from the CTF makes that fund the first Independent Power Producer (IPP) using this renewable energy source in the country.
“We welcome the participation of CTF in this project. These concessional resources will be instrumental in helping the country to diversify its energy mix by facilitating the deployment of renewable energy technologies while supporting Ethiopia in meeting the targets under its National Electrification Plan 2.0,” said the African Development Bank’s director of climate change and green growth, Anthony Nyong.
CTF’s investment funds the geothermal power plant project design, construction, commissioning and operation.
The project will take place under a Build, Own, Operate and Transfer (BOOT) program. It represents the first phase of the country’s strategy to construct a cumulative generation capacity of 150 MW by 2024. It will involve the construction of 11 kilometers (about 7 miles) of transmission line as well as a substation.
African Development Bank principal investment officer and renewable energy specialist, Antony Karembu, pointed out that the first as Ethiopia’s first IPP, CTF will leverage a number of climate finance options for the project by way of mobilising the country’s private sector operators. The project is expected to slash Ethiopian greenhouse gas emissions by more than 10 million tons of CO2 equivalent over the length of its operations. Karembu also said that this project would create about 600 jobs.
CTF will spark new Ethiopian renewable energy technologies beyond the geothermal plant. It will prop up future investments into the alternative power sector as first-mover risks shrink and a better understanding of compliance requirements is established among all market participants, said the African Development Bank’s CIF coordinator and principal climate finance officer.