More details emerge on Ethiopia's Tulu Moye geothermal
Further details have emerged on TM Geothermal Operations (TMGO) $2 billion 520MW Tulu Moye geothermal project in Ethiopia's Eastern Rift Valley. Sponsors - Reykjavik Geothermal (50%) and Meridiam Infrastructure Africa Fund (50%) - received expressions of interest (EOIs) on 30 April 2019 from prospective EPC contractors for the first phase of the project. Financial close is expected in April 2020.
The first 50MW phase has a total cost of $263 million and is expected to be financed with an oversubscribed 18-year $193 million debt package provided by the EIB, AfDB, FMO, DEG, Proparco and OPIC. Given the nature of Ethiopia’s energy market, pricing on the debt is expected to be high.
The $70 million equity portion is being put up by sponsors Meridian providing $40 million, as well as a $1.1 million grant provided by the USTDA and a $10 million grant provided by the Geothermal Risk Mitigation Facility (GRMF). The GRMF is funded by the UKs Department for International Development and Germany’s KFW as a means of allowing countries on or around the East African Rift Valley to utilize thermal resources and power.
The project is split into four phases with 50MW, 100MW, 100MW and 270MW capacities. Future phases are set to commence once proof of concept is complete and foreign currency availability uncertainties have been addressed. Sponsors may also consider financing phase four of the project through a $750 million bond issuance.
The project is backed by a 25-year PPA with energy utility Ethiopian Electric Power signed on 19 December 2017. Initial drilling for the first phase is scheduled to be complete by August 2019, with commercial operations in December 2021.
The full first phase project consists of drilling of around ten production wells and two injection wells, construction of a steam-gathering and injection system and a single unit water-cooled condensing steam power plant, a 230kV double bus switch-yard and 230kV transmission line to the Koka-Wakena 230kV line.
