The Board of Directors of the African Development Bank Group has approved a $10 million reimbursable grant to support a geothermal drilling project that will add 50 megawatts of renewable energy to Ethiopia’s power grid.
The Bank approved the fund for the Tulu Moye Geothermal Operations Plc (TMGO) project from the Sustainable Energy Fund for Africa (SEFA).
The project – owned by a Paris-based multinational corporation Meridiam and Reykjavik Geothermal of Iceland – entails developing and operating a 50-megawatt power plant in Ethiopia under a build-own-operate transfer structure.
The Bank says the program provides for the second phase of an additional 100 megawatts.
Upon completion, the project is expected to be the first large-scale private sector-driven geothermal development and the first Independent Power Producer in Ethiopia.
The grant complements existing facilities to mitigate the high risk associated with drilling activities and help attract commercial debt capital to finance the project, according to AfDB.
CEO of TMGO, Maxence Mirabeau said it “is essential to be financially supported during the risky drilling period by a key institution.”
MG/as/APA