Ethiopia to lead geothermal energy development in Africa

Many developing countries have good potential for geothermal energy development. The problem is that they usually lack money to cover upfront costs that are quite significant. In Ethiopia, for instance, the well known Reykjavik Geothermal company has agreed to build as much as 1,000 megawatts of geothermal energy projects within the next decade.

The total costs connected with this agreement are said to be around $4 billion, and the first drilling tests are expected to start early next year. The initial phase, which includes 15 MW of installation, should be completed by the end of 2015, and the 500 MW mark is expected to be reached by the end of 2018.

Ethiopian Electric Power Corp. has agreed to buy all the electricity from these geothermal energy projects under a 25-year contract. It has been also said that one-fourth to one-third of the project will be financed with equity.

Ethiopia is one of the eight African countries that can profit from being located at the Great Rift Valley in East Africa as this area is said to have abundant geothermal energy potential, estimated at around 20 GW.

This could be first of many agreements of this kind for the African continent. New geothermal energy projects could boost African economy in form of new jobs, as well as opening the door for new investors from all over the globe.

Ethiopia’s Prime Minister Hailemariam Desalegnhopes hopes that his country will become one of the African clean energy leaders. He recently said that his vision is for Ethiopia to harness the 80,000 megawatts of renewables over the next 30 years.