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Support for Geothermal Development in Tendaho (FI)

Region
Eastern Africa
Sector
Energy
Scope
FI
Grant Amount
EUR 8,000,000
Total project cost
EUR 26,400,000
Status
Approved
PFG Lead Financier
AFD

The main objective of the project is to support the economic development of Ethiopia through the development of geothermal, a clean and reliable renewable energy resource therefore enhancing Ethiopian resilience to climate change.

For the Tendaho field, the Government of Ethiopia has set two targets:

-the delineation and initial development of the shallow reservoir allowing in the short term exploitation of the shallow resource at the maximum sustainable capacity, presently estimated to be at least 10 MW;

-the exploration of the deep reservoir by the initial drilling of deep exploration wells. The Government of Ethiopia’s target is the development in the medium terms of at least 100 MW of generation capacity. 

This specific grant is structured as a Financial Instrument, including a prepayment clause in the case the projects assets would be sold within 10 years, as a success reward. It will be used to fill the financing gap for the exploration of the deep reservoir, following the assessment of the unsuitability of the local rigs. The EU-AITF Grants will be used alongside the AFD's loan and will support the drilling of the 6 shallow wells and 2 deep wells in the Tendaho Dubti area, in order to jump start the geothermal industry by de-risking the geothermal exploration phase. They will also contribute to the strenghtening of the promoter's capabilities in geothermal related activities.

06/2017