The African Development Bank has welcomed a decision by the Trust Fund Committee of the Clean Technology Fund, one of two funds within the Climate Investment Funds (CIF), to extend a $10 million concessional senior loan for development of the 50 MW Tulu Moyo Geothermal Power Plant project in Ethiopia.
The CTF approved the loan on April 20, 2020, for the project, which is seen as a critical step to the East African country’s drive to harness sustainable and resilient energy resources to support its economy and livelihoods. With this investment, CTF becomes the first progressive geothermal Independent Power Producer (IPP) in Ethiopia.
“We welcome the participation of CTF in this project. This concessional resource will be instrumental in helping the country to diversify its energy mix by facilitating the deployment of renewable energy technologies while supporting Ethiopia in meeting the targets under its National Electrification Plan 2.0,” said Anthony Nyong, director of climate change and green growth at the bank.
The project entails the design, construction, commissioning and operation of a 50 MW geothermal power plant under a Build, Own, Operate and Transfer (BOOT) scheme, and marks the first phase of the Ethiopian government’s plan to build cumulative generation capacity of 150 MW by 2024.
The project will include a sub-station and an 11 km transmission line.
Antony Karembu, principal investment officer and renewable energy specialist at the African Development Bank , said the project is expected to curb greenhouse gas emissions by over 10 million tons CO2 equivalent over its lifetime, and will create around 600 jobs.
The CTF funds will be drawn from the Dedicated Private Sector Program III designed to provide risk-appropriate financing for high-impact, large-scale private sector projects in clean technologies.