ADDIS ABABA – TM Geothermal Operation Plc (TMGO), a private power producer in Ethiopia, and a consortium of two foreign firms signed a Geothermal Power plant construction agreement worth 100 million US dollars.
TMGO inked the Engineering, Procurement and Construction (EPC) contract with a consortium of Mitsubishi Corporation & SEPCOIII Electric Power construction CO., Ltd on Wednesday.
The signing ceremony of the $100 million contract took place at the Ministry of Mines in the presence of Takele Uma, Minister of Mines.
TMGO issued the international bid for EPC contract for the first phase Geothermal Power project located at its Iteya geothermal site in April, 2019.
It selected the consortium from a total of seven international contractors prequalified and responded to TMGO’ s request for proposal.
As per the EPC contract, the contractors will kick off the construction of the power plant at the Iteya district of Oromia’s Arsi Zone in September 2022.
The company plans to dispatch 50MW of electricity to government-owned Ethiopian Electricity Power (EEP) in December 2024.
TMGO, a project company incorporated by the French investment fund Meridiam and Icelandic Geothermal firm Reykjavik Geothermal, signed the power purchasing deal with EEP on December 19, 2017.
Officials at the Ministry of mines see the project is vital for the power sector in Ethiopia.
“The development of geothermal resources either by the government or the private sector will add more power to electric supply in Ethiopia,” Takele said.
TMGO is currently drilling its fourth geothermal well, said the private power producer in a statement wednesday.
The statement said it “will continue to work in the coming years with the technical and financial experts in Ethiopia to develop a leading global geothermal industry financed by the most important Development Financial Institution”.
Ethiopia has an estimated potential of generating 10,000 Megawatt of geothermal energy.