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BusinessTulu Moye set to drill geothermal wells

Tulu Moye set to drill geothermal wells

An independent power producing company Tulu Moye Geothermal (TMGO) is set to commence drilling its first geothermal exploration wells in Ethiopia.

TMGO has signed a power purchasing agreement with the Ethiopian government to develop and sell electric power from a geothermal power plant to be built in Arsi zone, Tulu Moye locality near Eteya town. The company plans to build a geothermal power plant with an installed generation capacity of 150 MW with a total investment of 800 million dollars. The company has been undertaking various geological studies in the past several years. 

TMGO has awarded the drilling work contract to the Kenyan company, KenGen. Seventy percent KenGen is owned by the government of Kenya and 30 percent of the shares are listed on the Nairobi Stock Exchange. KenGen has a rich experience in drilling geothermal exploration wells in the Great East African Rift Valley.

TMGO and KenGen signed the drilling contract on Wednesday at the Addis Ababa Hilton Hotel in the presence of Kenyan Ambassador to Ethiopia, Catherine Mwangi, and representatives of the Ministry of Finance. The agreement was signed by Darrell Boyd, CEO of TMGO and Rebecca Miano, CEO of KenGen.  

According to Darrell BOYD, KenGen is a reputable company which has a decade experience in geothermal wells drilling work. “KenGen is one of the few profitable power companies in Africa. We look forward to starting our journey of exploration drilling here in Ethiopia with you. I know that it is going to be journey of success,” he said.

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Ambassador Catherine Mwangi remarked, “This is a very proud moment for me as a Kenyan Ambassador here in Ethiopia. This is a big win for KenGen and a big win for Kenya. It is the first big project that Kenya would be participating in Ethiopia.”

This is not the first project for KenGen in Ethiopia, however. They have signed contract with Ethiopian Electric Power (EEP) for the drilling of geothermal wells in Aluto Langano.

“It is a very especial day for KenGen,” Rebecca Miano said. “We are entering into another concession in the continent where we are making great inroads proving sustainable energy solution,” she said.

According to Miano, KenGen has invested heavily in expertize and latest equipment, instrumental in drilling work. “We have drilled over 300 wells. We want to assure TMGO that we will exert our best effort and are committed to deliver this project with excellence. KenGen is known for delivering on time. We have started a formidable and long lasting partnership,” she added.

According to Darrel Boyd, the contract signed with KenGen is 60 million dollars contract for the drilling of 12 geothermal wells each costing 5-6 million dollars. “We anticipate in drilling of 12 wells each 2500 meters deep. Drilling works begins in early January,” Boyd said.

TMGO anticipates generating 50 MW from the first phase of the geothermal power plant scheduled for completion in September 2022. The company will invest more than 250 million dollars on the first phase of the project.

TMGO will build a second power plant that will generate 100 MW. By 2024, TMGO would be able to generate 150MW of electricity to the national grid.     

The major financier of the geothermal project, Meridiam Infrastructure, attended the signing ceremony. Thierry Deau, founder and CEO of Meridiam, said a lot of resources are spent on the Tulu Moye geothermal project in the past three years. “Various studies have been undertaken to secure the geothermal resources; now we are going to invest more on the new phase to actually confirm there is a good resource,” he said. “For us it is a major project and it is an environmentally friendly one.  It will provide Ethiopia with base load (energy output) which is affordable and that is the key for us in selecting projects,” he added.      

TMGO was established in December 17, 2017. The company signed a power purchasing agreement with Ethiopian Electric Power on December 19, 2017, making it the second independent power project next to Corbetti geothermal. TMGO is a shareholding company of the French investment firm Meridiam SAS (51 percent share) and the Icelandic geothermal company Reykjavik Geothermal (49 percent share).    

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