Ethiopia’s first geothermal power plant to be delivered by the private sector is progressing as planned despite current challenges.

In December 2017, Tulu Moye Geothermal Operations (TMGO) was established, signing a Power Purchase Agreement and Implementation Agreement with Ethiopian Electric Power and the Government of Ethiopia, making it one of the first independent power projects in Ethiopia.

The project, set to generate and sell the power to Ethiopian Electric Power for the next 25 years, is sponsored by Meridian Infrastructure, a public-sector infrastructure long-term view investor, and Reykjavik Geothermal Ltd, a geothermal business based out of Iceland.

Ready for the next stage

We spoke last year to Darrell Boyd, the outgoing Chief Executive Officer, about the initial stages of this unique project and its challenges. Now, in the middle of 2021, we came back to see what progress has been made over the last 12 months.

After three years of leading TMGO, Darrell is leaving behind a project ready to progress into the next stage – a lot of work has been done into putting infrastructure into place to support geothermal exploration drilling, including water, roads, and 16 km of carbon-steel ten-inch pipeline. “For me personally, working on this ground-breaking project has been a fantastic journey with a great, talented team,” he affirms.

“Despite the negative press related to recent developments in the north and west of the country and the COVID, the project is moving forward. Ethiopia remains an investment destination. We have progressed with our lender due diligence and have done good work on the environmental, social, technical and legal fronts.”

He explained that although Ethiopia never had a full lockdown, the coronavirus pandemic did delay work, partly as restrictions imposed in Kenya created some difficulties for TMGO’s appointed geothermal drilling contractor, Kenya-based KenGen.

However, in June 2020, KenGen remobilised to Ethiopia, bringing their team to recommence geothermal drilling. All personnel were tested for the coronavirus prior to travel as part of a range of measures and protocols introduced by TMGO and KenGen to combat the spread of Covid-19 in order to help keep the team members, supply chain staff and local communities safe.

“We are now continuing with the work, although some issues remain to be resolved; this is only natural with a project of this kind – it is not only Ethiopia’s first private-sector developed greenfield geothermal investment but also the country’s first independent power producer,” says Darrell.

Developing the country’s geothermal industry

Ethiopia has a rich endowment of renewable energy sources. These include first hydro, but also wind, geothermal, solar as well as biomass. Geothermal power is set to be the second biggest contributor to Ethiopia’s power consumption by the year 2030, and the Tulu Moye project is one of the first major geothermal projects to help reach this ambitious goal.

The Tulu Moye Geothermal project has brought preeminent international geothermal scientists to Ethiopia, including some from the USA, Iceland, France, New Zealand & Kenya, as well as homegrown Ethiopian eminent expertise, in an example of international and African regional cooperation, and the company is determined to continue to work in the coming years with technical and financial experts in Ethiopia to develop a leading global geothermal industry.

From the beginning, TMGO made a clear commitment to avoid or, where this is not possible, minimise its impacts while contributing positively and collaboratively to lasting environmental and social benefits where it operates. The company is set to minimise the carbon footprint of its operations through appropriate investment in efficient technology; and to promote the efficient and sustainable use of natural resources, especially energy and water, by employing the principles of reduction, recovery, re-use and recycling.

Last but not least, TMGO is set to ensure that local communities benefit on an enduring basis through opportunities such as employment, local supply and contracting, and community development programmes.

“Despite the slow progress of drilling due to corona and the geological challenges underground, we continue with the range of our initiatives for the local communities including job creation, job training, apprenticeship schemes as well as bringing water and electricity to the very rural area of the project,” Darrell affirms.

Committed to progress

He acknowledges that in the last few months, geothermal drilling has continued at well pad GA, drilling an exploration well GA-2. The water supply system upgrades have continued with the start of pump installation in several of the water wells, upgrades of the water supply system and continued drilling of water wells. The civil works have been more or less completed, and the site is basically ready for hand over to the EPC contractor.

“We are now 2,200 metres deep and need to go a further 300 metres. The plan is to move to well No 3 later in May. When we move the rig, we will start to test the first two wells and that will be a real moment of truth to confirm a geothermal resource. So, while we do not have any fantastic news just yet, I can report positive indications.”

“Of course, a key piece of news is the appointment of the new CEO, Maxence Mirabeau, an experienced manager with more than 29 years of experience in different sectors, including renewable energies,” Darrell Boyd declares, noting that he himself will stay on until the end of May to make sure the transition is done in a proper fashion within a structured process.

“In terms of the future development it is important to highlight that the private sector reforms that have been ongoing here in the last years are continuing – the National Bank of Ethiopia has issued more than 40 new directives recently, indicating the government’s clear commitment to the reforms. It is a sign that the country is embracing the private sector and foreign direct investment since it has been recognised that a state-driven economy is not going to take the country to the next level. TMGO will continue to be part of that process.”