The Ethiopian Electric Power (EPP) is going to sign a power purchasing agreement with Enel Green Power (EGP), the Italian company that won the bid to build a 100MW solar power plant in Metehara town.
Enel Green Power, a leading European renewable energy developer, and its local partner in Ethiopia, Orchid Business Group, have won the bid put up by Ethiopian Electric Power to build a 100MW solar power plant in Metehara town located 230km east of Addis Ababa in East Shoa Zone of the Oromia Regional State. The contract was awarded to EGP in October 2017.
After it has been selected as the preferred bidder for 100MW solar power project, EGP has been negotiating with the EEP on the details of the power purchasing agreement (PPA). Reliable sources told The Reporter that there was a heated debate between EGP and EEP officials on the power tariff. “After Enel was awarded the Metahara solar project as the second-lowest bidder, it was told by EEP to deliver at the cost of the lowest bid, and the parties have been in negotiations on the matter,” sources said.
“The parties have resolved their differences and the draft agreement has been endorsed by the Ethiopian Electric Authority,” sources said. However, sources declined to disclose the tariff the parties agreed on.
The consortium has the right to develop, build and operate the 100MW of PV capacity in Metehara. According to the contract, EEP would buy all the electric power generated by Enel Green Power for 20 years. Sources told The Reporter that the power purchasing agreement would be signed by EEP and EGP after two weeks. Enel’s PPA would be the third one after Corbetti and Tulu Moye’s geothermal projects PPAs signed last week.
The Ethiopian government’s second Growth and Transportation Plan (GTP-II) is expected to collect nearly 12,000MW of new hydro, wind, geothermal and solar capacity in partnership with the private sector, with the aim of meeting the country’s electrification needs while diversifying its generation mix in line with the government’s energy plan for the years up to 2020.
Enel Green Power is a subsidiary company of Enel Group established in 2008 in Rome, Italy. Enel Green Power develops renewable energy sources including hydro, solar, wind and geothermal energy sources in Europe, the US, central and South America and Asia. It has also started operations in Africa in South Africa, Morocco and Zambia.
Enel Green Power has teamed up with Orchid Business Group to develop the Metehara Solar Power Plant. Orchid has a twenty percent stake in the solar project and it will co-invest in the project. Orchid Business Group PLC is an Ethiopian company primarily operating in the areas of infrastructure, construction and logistics. The company was established by a renowned Ethiopian businesswoman, Akiko Seyoum Ambaye, 15 years ago. Orchid will be the contractor that will build some parts of the power plant.
The EGP-led consortium will be investing approximately USD 120 million in the construction of the solar plant. The European Investment Bank has pledged support to the Metehara Solar energy development project. Christophe Litt, EIB’s head of representation to Ethiopia and the African Union, said that the bank was closely looking at project.
According to EGP, it will take 14 months to complete construction and start generation. The Metehara plant is expected to enter into operation in 2019. Once up and running, the facility will be able to generate approximately 280 GWh per year, while avoiding the emission of around 296,000 tons of CO2 into the atmosphere.
The country’s installed generation capacity has reached 4,280MW – 92 percent hydro, six percent wind and two percent thermal.
Currently, EEP is processing two more tenders for the construction of solar power plants in Mekelle and Humera towns each having 100MW installed generation capacity. Under the World Bank’s Scale Up Solar Program, two solar power plants are proposed to be built in the Afar and Ethio-Somali regional states each having 150MW. EEP plans to develop a total of five solar plants with an aggregate generation capacity of 800MW of solar energy in the GTP-II.