Ethiopia: Sustainable Energy Fund for Africa Provides $10 Million Grant to Support Tulu Moye Geothermal Resource Development | African Development Bank

The African Development Bank Group board of directors has approved a $10 million repayable grant from the Sustainable Energy Fund for Africa (SEFA) to support a geothermal drilling program that will add 50 megawatts of renewable energy to Ethiopia’s electricity system .

The Tulu Moye Geothermal Operations PLC (TMGO) project involves the development and operation of a 50 megawatt power plant in Ethiopia under a build-own-operate transfer structure. The program provides for an additional 100 megawatts in the second phase. When completed, it will be the first large-scale private sector-driven geothermal development and the first independent power producer in Ethiopia.

TMGO is owned by Meridiam, a Paris-based multinational corporation, and Reykjavik Geothermal of Iceland.

The SEFA grant will complement existing facilities to mitigate the high risk of drilling operations and raise commercial debt to finance the project. This funding is expected to inspire other private sector-driven geothermal projects in East Africa that have struggled to mobilize capital for drilling.

Maxence Mirabeau, CEO of TMGO, commented: “Getting financial support from a major institution during the risky drilling period is essential. SEFA is a unique solution to unlock geothermal potential in Africa. There aren’t that many who can do it! Thank you to the SEFA/African Development Bank team.”

João Duarte Cunha, SEFA’s Manager, said: “SEFA will play a vital role in supporting the assessment and development of geothermal resources, which is the riskiest phase of the project, and will catalyze investments in Ethiopia’s first private power plant, paving the way for more public-private partnerships in the country’s energy sector.”

SEFA is a multi-donor dedicated fund that works to unlock private sector investments that contribute to providing universal access to affordable, reliable, sustainable and modern energy services for all Africans.