USTDA grants funds for feasibility study of geothermal project in Ethiopia

Signing the agreement, left to right) Katrien Hinderdael of USTDA; Slav Gatchev, Managing Director of Delphos International; Darrell Boyd, Chief Executive Officer, TMGO; and Troy Fitrell, Chargé d’Affairs for the U.S. Embassy in Addis Ababa (source: USTDA)
Alexander Richter 27 Aug 2018

U.S. Trade and Development Agency awards a grant to TM Geothermal Operations Private Limited Company (TMGO), developer of the Tulu Moye geothermal project in Ethiopia. Funding will help work on a feasibility study by Delphos International.

Today, the U.S. Trade and Development Agency awarded a grant to TM Geothermal Operations Private Limited Company (TMGO)* , an Ethiopia-based company, to coordinate a feasibility study supporting development of the first 50 megawatts of a planned 520-megawatt Tulu Moye Geothermal project in the Main Ethiopian Rift.

The study will be conducted by U.S. firm, Delphos International, Ltd., which has expertise in supporting power sector development and financing from its work across 35 countries.

In December 2017, Ethiopian Electric Power signed implementation agreements and power purchase agreements allowing the private sector to develop the Corbetti and Tulu Moye geothermal projects. These historic agreements will support 1,000 megawatts of geothermal power generation and over $4 billion of private investment in Ethiopia.

“USTDA is pleased to support this important project which will foster energy diversification and improve access to affordable and reliable electricity in Ethiopia,” said Thomas R. Hardy, USTDA’s Director of Congressional and Public Affairs. “This study will also create opportunities for U.S. companies in Ethiopia’s growing geothermal sector.”

Chief Executive Officer of TMGO, Darrell Boyd, added, “By enabling TMGO to progress technical, environmental, legal, and financial workstreams for the Tulu Moye geothermal project, USTDA’s study is a key component to its success.”

Managing Director of Delphos International, Slav Gatchev, also added, “Delphos and its leading U.S. subcontractors look forward to delivering a bankable package to the grantee so that this landmark project may move forward expeditiously.”

Chargé d’Affairs for the U.S. Embassy in Addis Ababa Troy Fitrell said, “The United States has a long history of working to support Ethiopia’s economic development.  And as Ethiopia strives to develop light-manufacturing and other industries, few things will be as important to the country’s success as having sufficient, reliable, and affordable power.”  He added, “This project brings together a U.S. firm and an Ethiopian company – an example of how private-sector collaboration between our countries can achieve shared goals for mutual benefits.”

This project supports the goals of the U.S Government’s Doing Business in Africa and Power Africa initiatives, which focus on fostering space for economic growth and investment opportunity in Africa.

Chargé d’Affairs for the U.S. Embassy in Addis Ababa Troy Fitrell signed the grant along with TMGO’s Chief Executive Officer, Darrell Boyd. Dr. Frehiwot Woldehanna, State Minister of Water, Irrigation and Electricity, witnessed the signing.

*TMGO is owned by Meridiam, a leading global infrastructure fund manager, and Reykjavik Geothermal, a specialized developer with long-standing presence in Ethiopia.

Update – The following details have since been shared:

The grant amount is $1.1 million. The Tulu Moye Geothermal Operations will invest two billion dollars over eight years’ development and construction period. The project will be undertaken in four phases. The first phase with 50 MW installed capacity will cost USD 250 million. “We have to rich financial close by the end of next year. Initial wells will be drilled, prove the resource viability and sustainability. After confirming the commercial viability and sustainability commencement of delivery for phase1 for the first 50 MW will be by the end of 2021,” according to Darrell Boyd.

Source: USTDA