Tulu Moye Geothermal Operations Plc
This summary covers an application for coverage of equity and quasi-equity/shareholder loan investments made by Tulu Moye SAS, a company owned by Meridiam Infrastructure Africa Fund of France and Meridiam Infrastructure Africa Parallel Fund of France (together referred to as MIAF), and Reykjavik Geothermal Ltd. of Iceland, into Tulu Moye Geothermal Operations Plc in Ethiopia. MIGA has been requested to provide coverage for up to US$67.5 million to Tulu Moye SAS against the risks of war and civil disturbance, breach of contract, and expropriation, for a tenor of up to 15 years.
The Project involves the design, construction, operation and maintenance of a greenfield geothermal power plant in the Oromia region of Ethiopia, located approximately 100 kilometers south east of Addis Ababa. The power plant will have potential installed capacity of up to 150 megawatts (MW). Development of the power plant, the geothermal resources at the site, and the related infrastructure will be carried out in two phases: phase 1 (50MW) and phase 2 (100MW). MIGA intends to cover the exploration and development activities of Phase 1.
This Project was originally disclosed on September 5, 2018 click here to View.
The Project is a Category A under MIGA’s Policy in Environmental and Social Sustainability (2013) because it has potentially significant adverse environmental and social (“E&S”) risks and impacts. The most significant E&S risks include: land acquisition and involuntary resettlement; impact on water resources (water use and effluent discharge); waste generation (e.g. drill cuttings/fluids); impacts on biodiversity; air, noise and nuisance odor emissions; and occupational and community health and safety. Additional E&S impacts include the cumulative impacts associated with the potential development of future phases of the Project. Click here to view the Environmental and Social Review Summary.
The key development impact of this project is a diversification of Ethiopia’s energy supply away from hydroelectricity. Ethiopia has a strong reliance on its hydroelectricity with this resource accounting for nearly all of its generated power. This leaves the country vulnerable to exacerbated energy shortages during periods of drought. The success of the Project would provide an alternative energy source and result in baseload clean energy production at a competitively low tariff. MIGA’s support of the Project is aligned with MIGA’s strategic focus on countries International Development Association (“IDA”) member countries.