Monday, October 2, 2023
BusinessPower co. to sign agreements for Corbetti, Tulu Moye geothermal projects

Power co. to sign agreements for Corbetti, Tulu Moye geothermal projects

The Ethiopian Electric Power is going to sign contract agreements with independent power producers for the construction of geothermal power plants in Corbetti and Tulu Moye localities in the Oromia Regional State.

The agreement will be signed on December 19 at Sheraton Addis. Ethiopian Electric Power will sign the contract agreements with Corbetti Geothermal which will develop a 500WM geothermal power plant in Corbetti locality, East Arsi zone, near Shashemene town. The total cost of the project is estimated at two billion dollars. The project implementation agreement was supposed to be signed in August 2016 but delayed due to various reasons.

Reykjavik Geothermal (RG), an Icelandic company specialized in geothermal energy development projects, signed a framework agreement “called Heads of Terms” with the then Ethiopian Electric Power Corporation in October 2013 that enables it to develop 1000 MW of electricity from geothermal energy sources in Corbetti, Tulu Moye and Abaya localities in East Arsi Zone. Reykjavik Geothermal with its local partner Rift Valley Geothermal established Corbetti Geothermal Plc and brought along two major investors – Berkley Energy and Iceland Drilling – who have shown a keen interest to invest on the geothermal development project. 

RG split the 1000 MW geothermal development project into two phases – the 500MW Corbetti project and the 500MW Tulu Moye and Abaya project – each costing two billion dollars. Corbetti Geothermal Plc, a special purpose vehicle company established by RG in Ethiopia, has been working on the Corbetti geothermal development project located 270 km south – east of Addis Ababa in East Arsi Zone, Shalla Woreda, Corbetti Kebele. RG owns a 28.5 percent stake on Corbetti Geothermal Plc, Berkley Energy 53.5 percent and Iceland Drilling 18 percent. Corbetti Geothermal secured funding from major international financiers, including African Development Bank and European Investment Bank. Many other public and private investors from the US, the UK and other European countries are behind the Corbetti geothermal project. The project is also backed by the US Power Africa Initiative.

After a long negotiation Corbetti Geothermal and the EEP signed a conditional power purchasing agreement in July 2015 during former US president Barack Obama visit to Addis Ababa. The company agreed to build the geothermal power plant and sell electric power for 7.53 US cents per KWh for the national grid.

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The Ethiopian Electric Power will also sign the second agreement for Tulu Moye geothermal power plant project on Tuesday with RG. RG is the first independent power producer company to sign power purchasing agreement with Ethiopian government.    

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