This project summary covers the initial equity and shareholder loan investments made by Tulu Moye SAS in the project enterprise Tulu Moye Geothermal Operations Plc in Ethiopia. Meridiam and Reykjavik Geothermal (together, the Sponsors) are investors in Tulu Moye SAS. Tulu Moye SAS submitted a definitive application to MIGA for a guarantee up to 15 years of its US$ 58 million investment in the project enterprise against the risks of breach of contract, expropriation and war and civil disturbance.
This greenfield project involves the exploration, design, development, financing, construction, operation and maintenance of a 520MW geothermal power plant located approximately 100 km south east of Addis Ababa in the Oromia region of Ethiopia. The development of the geothermal resources at the site and construction of the power plant as well as the related infrastructure will be carried out in four phases, with a first phase of 50MW. MIGA’s support is focused on this first phase. To date, the Sponsors have begun surface exploration of the geothermal resources with major civil engineering works to be engaged by Q4 2018.
The Project has been provisionally classified as category A under MIGA’s Policy in Environmental and Social Sustainability. The complete Environmental and Social Review Summary (“ESRS”) can be found here.
The key development impact of this project is the diversification of Ethiopia’s energy supply. Ethiopia faces an energy deficit, and has a strong reliance on hydroelectricity with this resource accounting for nearly all of its generated power. This leaves the country vulnerable to energy shortages during periods of drought. The project is expected to increase the country’s power supply, thereby supporting its efforts to be a regional power exporter, and provide clean and reliable baseload energy at a low tariff supporting industrial developments needed to boost the economy.
Additionally, MIGA’s support of this investment is aligned with an important pillar of the organization’s 2018-2020 strategy, a focus on countries eligible for financial support from the International Development Association.