ETHIOPIA - Tulu Moye Geothermal Resource Development Development


Project Summary

Approval Date 07 Dec 2022
Sovereign / Non-Sovereign Non Sovereign
Sector Power
DAC Sector Code 23260
Commitment U.A 7,514,051.28
Status Approved

Project General Description

The project falls under Sustainable Energy Fund for Africa (SEFA)’s Green Baseload area of intervention as geothermal is one of the most reliable (high load factor) renewable energy sources in Eastern Africa, with over 15,000 MWe of generation potential. The project will be the first large-scale private sector-driven geothermal development in Africa and the first privately financed IPP in Ethiopia (“Tulu Moye”). The project involves geothermal resource development, construction, commissioning, and operation of a 50 MW power plant in Ethiopia under a build own operate transfer (“BOOT”) structure, to be developed for a further 100MW as the second phase. The first phase of the project is intended to be implemented in two sub-sets of 25MW each for geothermal resource development purposes only. The sub-sets arrangement is due to the capital intensity of the drilling phase, which is a huge burden for the equity investors and a lack of risk appetite from debt financiers to support the exploration drilling activities.

Project Objectives

Tulu Moye will add 50MW of baseload renewable energy capacity to the national system (with an additional 100 MW in Phase II). The project is expected to generate approximately 600 jobs, out of which 500 are during construction and 100 during operations. The effect of CO2 reduction is assessed at 826,570 tons of CO2 equivalent per year. Private sector capital of around USD 297M (equity and debt) will be mobilized for the phase I only. The project will lay a foundation for the future development of IPPs in Ethiopia and attract much-needed private capital in the geothermal development area.

Beneficiaries

The project will benefit Ethiopia by providing clean energy and contributing to the diversification of the Country’s energy mix from highly relying on hydro generation (93% of total capacity). Tulu Moye Geothermal Operations (“TMGO”) is the Project Company registered in Ethiopia.

Participating Organization

Funding
Sustainable Energy Fund for Africa

Information

IATI identifier 46002-P-ET-FAA-002
Last Update 26 Jan 2023

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Contact Details

Email private-sector@afdb.org

Geographic Location

Country Ethiopia