The Ethiopian government has signed key contracts with Reykjavik Geothermal (RG), which will build two geothermal projects with a combined capacity of 1,040MW in the African country.
The two projects, which will be developed in phases, will require a total investment of over $4.4bn.
Tulu Moye Geothermal, a joint venture of Meridiam and RG, has signed a Power Purchase Agreement and Implementation Agreement (PPA/IA) with Ethiopian Electric Power (EEP) and the Government of Ethiopia (GoE) for a 520MW geothermal project in the Tulu Moye area.
Corbetti Geothermal, a subsidiary of RG, has signed a similar PPA and IA EEP and the GoE for a 520MW geothermal power plant in the Corbetti area.
The Corbetti project is located in the Corbetti Caldera 250km south of Addis Ababa in the Oromia region.
Corbetti is an Ethiopian project company funded by Reykjavik Geothermal, Iceland Drilling, African Renewable Energy Fund and InfraCo Africa.
The Tulu Moye Geothermal project, which will be constructed in the area around the Tulu Moye volcano in Oromia, is led by French, US and Icelandic investors.
The location for the geothermal project was selected following a three-year study carried out by RG team and Ethiopian scientists on the site.
Initially, the partners at Tulu Moye are planning to bring 50MW on line by 2020. The project is expected to reach its full capacity of 500MW by 2023.
Reykjavik Geothermal CEO Gudmundur Thoroddsson said: “As the first Independent Power Producer (IPP) in Ethiopia, RG has helped create the legal, financial and technical framework for the historic projects that have been signed today.
“We look forward to working with Meridiam SAS to develop the 500 megawatt Tulu Moye geothermal project and to working with all of our colleagues in Ethiopia to develop the geothermal industry in this great country.”
Following the signing of contracts, the two projects will now reach the drilling stage.