Tulu Moye Geothermal Operations Plc
On March 10, 2021, MIGA issued a guarantee for US$67.5 million to Tulu Moye SAS of France to cover its equity and quasi-equity investments in Tulu Moye Geothermal Operations Plc of Ethiopia against the risks of Breach of Contract, Expropriation and War and Civil Disturbance for a period of up to 15 years. Tulu Moye SAS is jointly owned by Meridiam SAS of France and Reykjavik Geothermal Ltd. of Iceland.
MIGA’s risk exposure under the guarantee is proposed to be shared with the IDA Private Sector Window (PSW). The PSW involvement will be via a shared first loss facility that will assist in spreading the risk and result in a reduced cost of the guarantee for the project enterprise. The project meets the minimum concessionality principle and the amount of subsidy is estimated to be less than 0.5% of the total project cost over the envisaged 15 year guarantee period.
The Project involves the design, development, construction, operation and maintenance of Phase 1 of an up to 150 mega-watt (MW) greenfield geothermal power plant in the Oromia region of Ethiopia, located approximately 100 kilometers southeast of Addis Ababa.
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.