Corbetti geothermal project to kick off after final agreement signing

 Corbetti Geothermal and the government of Ethiopia have solved their differences after a period of dispute. The two are expected to sign a final agreement which will enable the company to embark on Africa’s largest geothermal project.

Furthermore, the developer Corbetti Geothermal, the Ethiopian Ministry of Water, Irrigation and Electricity (MoWIE) and the Ethiopian Ministry of Finance and Economic Cooperation are finalizing negotiations to sign the final agreement.
Reykjavik Geothermal (RG), signed a framework agreement called “Heads of Terms” with the then Ethiopian Electric Power Corporation in October 2013. This enabled it to develop 1,000 MW of electricity from geothermal energy sources in the South Eastern part of Ethiopia. 1RG with its local partner Rift Valley Geothermal established Corbetti Geothermal Plc. and brought along major investors. Berkley Energy and Iceland Drilling, the two investors have shown interest to invest on the project. Iceland Drilling would be providing drilling services under the agreement and receive an equity stake in return.
According to the Strategy and Investment Director of the Ethiopian Electric Power (EEP) Mekuria Lemma, the two have agreed on all the pending issues on the power purchasing agreement. The implementation agreement signing delayed because of some differences that arose between the company and the Ethiopian government.
RG owns a 28.5% stake on Corbetti Geothermal Plc, Berkley Energy 53.5% and Iceland Drilling 18%. Corbetti Geothermal secured funding from major international financiers. The project is also backed by the US Power Africa Initiative.
Moreover, the company agreed to build the geothermal power plant and sell electric power for 7.53 US cents per KWh for the Ethiopian national grid.  The country’s total generation capacity has reached 4,280 MW of which 92% is hydro. The remaining 6% is wind and other 2% thermal. Ethiopia’s geothermal potential is estimated 10,000MW while the hydro power potential generation capacity is as high as 45,000 MW.
The Corbetti Geothermal project which located in East Arsi Zone, is projected to cost an estimated $2Bn.

Posted on : 17 Aug,2017

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