ADDIS ABEBA – Ethiopia and Saudi Arabian utility developer, ACWA POWER, signed a letter of intent for solar power projects on Tuesday.
The agreement was signed a month after the government approved ACWA POWER’s bid for renewable energy projects located at Somali and Afar regional states.
The Ministry of Finance of Ethiopia and the International Company for Water and Power Projects (ACWA POWER) signed a Letter of Intent for $300 million Gad and Dicheto solar PV projects totaling 250 MW.
Dicheto and Gad solar power projects will be implemented in Afar and Somali regional states, respectively.
“The purpose of the Letter of Intent is to establish a gap-filling transitory arrangement among the parties until the Special Purpose Vehicle (SPV) or local company representing the winning company is formally formed and conclude the Power Purchase Agreement (PPA) and Implementation Agreement (IA) with the contracting authority and Ministry of Finance respectively,” said Ministry of finance said.
The Public Private Partnership Board picked ACWA POWER as the winner out of the 12 shortlisted companies in September. The company has offered 2.5260 US cents/kwh for both Gad and Dicheto sites.
Currently, these solar power purchase tariffs are the lowest in Africa and one of the lowest globally, according to the Ministry of Finance.
Headquartered in Saudi Arabia, ACWA Power has assets in 12 countries and has bid for renewable energy projects in four other new countries – Tunisia, Cambodia, Azerbaijan and Uzbekistan.
The current value of the Saudi Arabian utility developer’s portfolio is more than $42 billion, with renewable accounting for 23%.