Ethiopia’s Corbetti Geothermal Project Gains New Life

Ethiopia’s Corbetti geothermal power project has seen renewed momentum in recent weeks, with London-based investment vehicle Taranis Operations joining the funding partners behind the scheme.

In mid-June, Taranis signed a convertible loan agreement with multilateral private investment mobiliser Private Infrastructure Development Group (PIDG) to support the development of the project, located in the Corbetti Caldera area, 250km from Addis Ababa. The agreement could unlock US$27 million of equity for the scheme.

In an exclusive interview with ConstructAfrica, PIDG project development adviser Tim Jackson said Corbetti Geothermal (CGPLC), the special purpose vehicle created to develop the scheme, has built two well pads, laydown and camp areas, 6km of roads, 4 water wells and 10km of water pipeline so far. The next stage is to mobilise a drilling rig once Taranis has completed its investment.

The first phase of the project will commence once exploration drilling is complete and will consist of installing production wells and a steam field for a 50MW power plant. A second phase is expected to enable an additional 100MW of capacity. The scheme is targeted to be developed in two phases over a six-year period.

The overall Corbetti project area has an estimated geothermal capacity exceeding 1GW, with a 300MW plant estimated to require upwards of US$1 billion to construct.

Development of the scheme was initiated in 2011 by Iceland’s Reykjavik Geothermal. In 2014, Berkley Energy, through the Africa Renewable Energy Fund, acquired the majority interest in the project and was joined by PIDG’s project development solution InfraCo in 2015. CGPLC signed a power purchase agreement with Ethiopian Electric Power (EEP) and an implementation agreement with the government for the project in 2020.

Asked about the factors that helped advance the loan signature for the project, considering the scheme has been in development for more than a decade, PIDG told ConstructAfrica the recent economic reforms undertaken by the Ethiopian government have been helpful to attracting new investors, but the main driver was an investor keen to invest in geothermal and looking for the most attractive privately developed geothermal project in Africa.

The development of geothermal power is considered a strategic priority by the Ethiopian government, with electricity generation currently dominated by hydropower at 95%. The authorities are looking to diversify the generation mix and facilitate increased climate resilience through the addition of solar, wind and geothermal capacity.

Moreover, additional capacity is required to enable the nation’s Homegrown Economic Reform Agenda to facilitate new electricity connections and industrial growth, as well as enable exports through planned interconnections, which is expected to improve Ethiopia’s balance of payments by billions of dollars by 2030. The development of geothermal energy will also assist the government in electrifying transport infrastructure to reduce the reliance on imported fossil fuels.

Ethiopia holds promising reserves of geothermal power due to its location in the middle of East Africa's East African Rift System (EARS) region. The country has more than 10GW of potential resources found mainly in the Afar and Oromia regions.

A total 7.3MW of installed capacity was commissioned in 1998 at Aluto-Langano in the Oromia region, with the plant now set to be expanded. Meanwhile, a 150MW facility is planned at Tulu Moye in the same region.

In mid-June, EEP invited bids for upstream site preparation work at the Alalobad site in the Afar region. The work will involve the supply and installation of a water supply system for drilling sites at the project, which is receiving World Bank support under the Power Sector Reform, Investment and Modernisation in Ethiopia (PRIME-1) programme.

EEP has also identified further sites for potential geothermal development, namely Tendaho in the Afar region, and Aluto-Adonshe and Aluto-Bobessa in the Oromia region. Drilling activities at Aluto-Langano and Aluto-Bobessa have resulted in more than 20MW of available energy at well heads. For Tendaho, site surface exploration and drilling reports suggest the site has high resource potential. The development of these projects will be supported by PRIME-1, which is set to run until August 2030 with a total investment cost of US$537 million.

Top photo: Aluto-Langano geothermal site (Source: Facebook @ EEP)