The African Development Bank (AfDB) has welcomed the decision of Trust Fund Committee of the Clean Technology Fund (CTF), one of two funds within the Climate Investment Funds (CIF), to extend a US$10mn concessional senior loan to develop 50MW Tulu Moyo Geothermal Power Plant project in Ethiopia
CTF approved the loan on 20 April 2020 for the project. It is a critical step to the East African country’s drive to harness sustainable and resilient energy resources to support its economy and livelihoods. With this investment, CTF becomes the first progressive geothermal Independent Power Producer (IPP) in Ethiopia.
Anthony Nyong, director of Climate Change and Green Growth at the Bank, said, “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 project entails the design, construction, commissioning and operation of a 50MW geothermal power plant under a build, own, operate and transfer (BOOT) scheme and marks the first phase of the Ethiopian government’s plan to build cumulative generation capacity of 150MW by 2024.
Antony Karembu, principal investment officer and renewable energy specialist at the AfDB, noted that as the first progressive geothermal Independent Power Producer in Ethiopia, CTF will leverage climate finance options in mobilizing private sector operators for the project.
The project is expected to curb greenhouse gas emissions by over 10mn tonnes CO2 equivalent over its lifetime, and will create around 600 jobs, Karembu said.
CTF will catalyse 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, Leandro Azevedo, principal climate finance officer and CIF coordinator at the AfDB stated.
The CTF funds will be drawn from the Dedicated Private Sector Program III designed to provide risk-appropriate financing for high-impact, large-scale private sector projects in clean technologies.
