US$15m committed to a pioneering geothermal project in Ethiopia.
9th Sep 2015
On the 9th of September 2015, InfraCo Africa signed a Loan Agreement with the Africa Renewable Energy Fund (AREF) to invest alongside Reykjavik Geothermal and Iceland Drilling into Corbetti Geothermal plc. (‘Corbetti’). InfraCo Africa has commited US$15m of investment to develop up to 70MW of greenfield geothermal power. As the first geothermal IPP in Ethiopia, Corbetti has the potential to transform Ethiopia’s energy system.
Located in the Corbetti Caldera, 250km south of Addis Ababa, the multi-phase Corbetti project will deliver up to 70MW of geothermal power by 2020. If successful, subsequent phases could see Corbetti increase its installed capacity to 500MW, mobilising approximately US$2 billion in foreign direct investment over the next 8-10 years.
Ethiopia has experienced rapid growth in demand for energy over the past decade, which is forecast to outstrip supply. The GoE has acted decisively, publishing its 2011 Climate Resilient Green Economy (CRGE) Strategy promoting rapid, carbon-neutral economic growth. To this end, the GoE’s Scaling-Up Renewable Energy Programme (SREP) seeks to achieve a fivefold increase in generation from renewable energy sources over 5 years, with a further doubling by 2030. The country currently derives 92.5% of its electricity from hydro sources, however this supply is vulnerable to changes in rainfall patterns. The GoE therefore intends to increase the relative share of geothermal power within the country’s energy mix.
Ethiopia’s geothermal potential has been long recognised with the GoE being first to establish a 7.3MW geothermal plant at Aluto Langano. The focus now is on scaling-up production and proving new resource, so that the country has 1,000MW of installed geothermal capacity by 2030. Corbetti will pioneer commercial-scale geothermal IPPs: proving a new geothermal resource on a greenfield site, establishing market precedent and working with the GoE to build the regulatory frameworks required to deliver on their ambitious targets.
The Corbetti project reflects InfraCo Africa’s commitment to providing capital for the development and first phases of pioneering sustainable infrastructure projects. Adopting a phased approach ensures swifter delivery of the social and economic benefits of clean, affordable power whilst managing risks and building investor confidence to attract the finance needed to increase installed capacity.
Green growth powered by the earth's core
The Corbetti project will initially develop up to 70MW of geothermal power before gradually mobilising a further US$2billion in foreign direct investment to increase installed capacity to 500MW. This pioneering project will be situated on a greenfield site, prove a new geothermal resource and be not only the first geothermal IPP in Ethiopia but also only the second in sub-Saharan Africa.