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The Sustainable Development Fund for Africa (SEFA) has approved a $10 million grant that will add 50MW of geothermal energy to Ethiopia’s power system.
The Tulu Moye Geothermal Operations PLC (TMGO) project entails developing and operating a 50MW power plant in Ethiopia under a build-own-operate transfer structure. The programme provides for the second phase of an additional 100MW. On completion, it will be the first large-scale private sector-driven geothermal development and the first independent power producer in Ethiopia.
TMGO is owned by Meridiam, a Paris-based multinational corporation, and Reykjavik Geothermal of Iceland.
The SEFA grant complements existing facilities to mitigate the high risk associated with drilling activities and help attract commercial debt capital to finance the project. This funding is expected to inspire other private sector-driven geothermal projects in Eastern Africa that have struggled to mobilise capital for drilling.
Maxence Mirabeau, CEO of TMGO, commented: “It is essential to be financially supported during the risky drilling period by a key institution. SEFA is a unique solution to unlock geothermal potential in Africa. Not so many can do it. Thank you to the SEFA/African Development Bank team.”
João Duarte Cunha, SEFA’s manager, said: “SEFA will play a critical role in supporting geothermal resource assessment and development, which is the riskiest phase of the project, and catalyse investments in the first private power plant in Ethiopia, paving the way for more public-private partnerships in the country’s energy sector.”
SEFA is a multi-donor special fund working to unlock private sector investments that contribute to providing universal access to affordable, reliable, sustainable and modern energy services for all Africans. |
