Ethiopia, Djibouti embarking on major Geothermal Power Schemes

(Shem Oirere)

Djibouti and Ethiopia are developing new geothermal power capacities that are intended to enable them meet increasing demand for electricity and enhance their sustainable-energy portfolio.

The World Bank has provided details about its contractor prequalification procedure for the drilling of four full-size geothermal production wells in Djibouti, while Icelandic powerplant builder Reykjavik Geothermal says it hopes to commence its $2-billion Corbetti Geothermal Power Project in Ethiopia in July.

The World Bank, one of the financiers of the $31-million Djibouti Geothermal Power Project, which is being developed by another Icelandic firm, Reykjavik Energy Invest, advertised the invitation for bids from qualified drilling companies to execute the project. Funds will come from a number of institutions.

The bank said the steam-well drilling program entails civil engineering preparatory works, to be funded by the African Development Bank (AfDB) at Lake Assal geothermal field.

The second component—the actual drilling of the four wells—is co-financed by Global Environment Facility, the OPEC Fund for International Development and the World Bank’s International Development Association (IDA). French financier Agence Française de Développement (AFD) will fund the acquisition of steel material needed during the execution of the drilling program, while the inspection and testing of reservoir flow rates will be supported by Energy Sector Management Assistance Programme.

Technical assistance support will be provided by the AfDB for designing the drilling program and the well test protocol by a geothermal consulting company yet to be named.

The final component would involve executing the well test protocol and ensuring third-party certification of the results of the drilling program before preparing a technical feasibility study for the geothermal powerplant, “provided that the geothermal resource is suitable for power generation.”

Djama Guelleh, Djibouti’s head of electricity, said if the geothermal resource is proven to be commercially viable for large-scale power generation, “a follow-on project will be undertaken to competitively offer the geothermal resource to the international independent-power-producer market.”

The project, to be developed under a public-private partnership, would help Djibouti cut reliance on imported electricity from neighboring Ethiopia and meet the country’s peak demand of 70 MW, of which Ethiopia meets 65%.

In Ethiopia, which gets up to 90% of its 2,000-MW installed power-generating capacity from dams, Reykjavik Geothermal said in March it will, by next July, commence the development of the $2-billion geothermal project with capacity to generate 500 MW.

The company signed a deal for the development of the geothermal plant on an imploded volcano in the Ethiopian Rift Valley in October last year through its local entity, Corbetti Geothermal Power.

“We think we have a project that can have a return on equity that is acceptable by the investors,” said Chief Operating Officer Gunnar Orn Gunnarsson in an interview with Bloomberg in March.

He said the company expects to bring aboard at least four other partners under an agreement that would help mobilize between $40 million to $80 million to help cover drilling of at least five wells capable of producing 20 MW.

Reykjavik plans to construction a 1,000-MW plant in two phases, with the first phase of 500 MW expected over the next five years and another 500 MW in eight years.

Production drilling and construction of the first phase of installation (500 MW) is expected after financial close in the first quarter of 2015; full commissioning is expected by the end of 2018.

The U.S. is supporting the project as part of the $7-billion Africa Power initiative, which targets increased electricity access in at least six African countries.
Source: Engineering News-record, May 19, 2014, titled “
Djibouti and Ethiopia Pursuing Geothermal Power Schemes”.


Content gathered and compiled from online and offline media by Hornaffairs staff based on relevance and interest to the Horn of Africa.

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