In a landmark announcement, Prime Minister Hailemariam Desalegn and Reykjavik Geothermal revealed plans to develop one of the world's largest geothermal power projects in the Corbetti area in Ethiopia.
The Corbetti Geothermal Project, hich will be built in two, 500 MW phases, will be Ethiopia's first independent power project, and one of the largest in Africa.
Reykjavik Geothermal, a US-Icelandic development company, has been working with the Ethiopian Electric Power Corporation (EEPCO) and various government ministries for the past two years to finalize the power purchase agreement.
The first 500 MW plant will be built inside the Corbetti Caldera, which is considered one of the top geothermal resources in the world by the team of Icelandic and Ethiopian geoscientists that have studied the area.
The first 10 MW of power will be online in 2015, with an additional 100 MW in 2016 and the full 500 MW to be operational by 2018.
“Africa needs to transform, and energy is at the center of that transformation,“ said Prime Minister Desalegn. “My vision is that over the next 30 years we will need to harness as much as 80,000 MW of hydro, geothermal, wind and solar power, not just for Ethiopia, but for our neighboring countries as well. This cannot be done by public investment alone; we will need to partner with the private sector to bring in significant private investment going forward. From that perspective, this 1,000 MW project with RG is not that large – but it‘s a great start. What Africa needs now is not just aid, but trade and investment.“
Deputy Prime Minister and EEPCO Chairman, H.E. Dr. Michael Debretsion said the project is a significant step for EEPCO in realizing its strategic vision of being the regional leader for power generation and export in East Africa.
"We believe Ethiopia has over 10,000 MW of geothermal potential which provides base load power and is a perfect complement to our over 50,000 MW of hydropower potential," Debretsion said.
Michael Philipp, chairman of Reykjavik Geothermal, described the partnership agreement as a ground-breaking achievement.
"Reykjavik Geothermal will be the first Independent Power Producer (IPP) in Ethiopia and the Corbetti Project will be the largest single geothermal power plant ever built in Africa," Philipp said. "The agreement for 1,000 MW of geothermal power, an investment of $4 billion over an 8-10 year period, confirms the confidence of international investors in the growth and stability of the Ethiopian Economy. This project is being led by US private investors and has generated significant interest from the development agencies involved with the Power Africa initiative announced by President Obama."
The Federal Democratic Republic of Ethiopia is located in the north-eastern part of Africa commonly known as the Horn of Africa. It is strategically proximate to the Middle East and Europe, together with its easy access to the major ports of the region, enhances its international trade.