$10m Towards Ethiopia’s Sustainable Electrification
Welcoming the decision by the Trust Fund Committee of the Clean Technology Fund (CTF) to extend a $10 million loan for the development of the 50 MW Tulu Moyo Geothermal Power Plant project in Ethiopia, the African Development Bank acknowledges the need for renewable energy in facilitating development.
The CTF empowers transformation in developing countries by providing resources to aid the production of low carbon technologies with immense potential for long-term greenhouse gas emission savings. With their investment, CTF is now the first geothermal Independent Power Producer in Ethiopia, leading the way for the potential development of more CleanTech opportunities in the country.
This loan by the CTF is a positive step for sustainable electrification in Ethiopia. Anthony Nyong, Director of Climate Change and Green Growth at the Bank, stated “We welcome the participation of CTF in this project. This concessional resource will be instrumental in helping the country to diversify its energy mix by facilitating the deployment of renewable energy technologies while supporting Ethiopia in meeting the targets under its National Electrification Plan 2.0”.
The National Electrification Program (NEP) aims to achieve universal electrification by 2025. With this, there has been the development of The Ethiopia Electrification Program which aims to increase access to electricity in Ethiopia and enhance institutional capacity for planning and implementation of the government’s electrification program. This loan by the CTF will help with meeting the targets set by the NEP, as stated by Nyong, whilst reducing greenhouse gas emissions through the use of low carbon technologies.
Sustainability in Ethiopia
Consiting of the design, construction, commissioning and operation of a 50MW geothermal power plant, the project resides under a BOOT scheme (Build, Own, Operate and Transfer). The project will include a sub-station and an 11km transmission line.
The development of this power plant marks the first phase of the Ethiopian government’s plan to build a cumulative generation capacity of 150MW by 2024 whilst, as stated by Antony Karembu, Principal Investment Officer and Renewable Energy Specialist at the African Development Bank, “curb[ing] greenhouse gas emissions by over 10 million tonnes CO2 equivalent over its lifetime and will create around 600 jobs”. This project, therefore, is not only going to benefit the electrification of Ethiopia but aid the reduction of CO2 emissions whilst creating jobs for citizens, supporting its economy.
With the overarching objective to spur sustainable economic development and social progress in its member countries, the African Development Bank is contributing to poverty reduction in Africa’s developing countries. As highlighted by Karembu in his statement, this loan by the CTF will fulfil these overarching objectives, supporting Ethiopia’s social and economic development.
Taking steps towards a clean, industrial Africa
As a step towards industrializing Ethiopia and, in turn, Africa, the loan, which CTF approved on the 20th April 2020, is a critical step to the East African country’s drive to harness sustainable and resilient energy resources, both supporting its economy and livelihoods of the Ethiopian citizens.
In a world more conscious for the development of CleanTech and sustainable energy sources, the development of geothermal power plants, such as this one in Ethiopia, can aid the industrialization of developing countries.
As stated by Karembu, this Ethiopian power plant will create 600 jobs helping create a more industrialised workforce in Ethiopia. This is particularly significant when farming makes up 70% of the continent’s economy as there is potential for a shift from farming into industrialization through the need for CleanTech and sustainable energy sources.
The World Bank provided more than $11.5 billion in financing for renewable energy and energy efficiency in Africa’s developing countries. Not only creating jobs for citizens but giving them access to affordable, reliable and sustainable energy.
The development of this new geothermal power plant is a strong step forward in the industrialization of Ethiopia and as stated by Leandro Azevedo, Principle Climate Finance Officer and CIF coordinator at the African Development Bank, “CTF will catalyze the deployment of renewable energy technologies in Ethiopia and will underpin future investments into the sector as first-mover risks are reduced and compliance requirements are better understood to all market participants”. Showcasing how this investment into the geothermal future of Ethiopia is a stepping stone to a new, clean, electrified country.