Ethiopia Inks 70 MW Geothermal Deal with Kenyan, Chinese Firms
February 26, 2019 (Ezega.com) - According to reports, the government utility agency Ethiopian Electric Power (EEP) on Monday inked a deal with one Kenyan firm and two Chinese companies for the 70 Megawatt Geothermal energy drilling project.
Kenya Electricity Generating Company (KenGen) , Shandong Kerui Oilfield Services Group Co. Ltd, and Shandong Kerui Oilfield Service Group are the three companies awarded the project.
The ambitious Aluto-Langano project is financed by the World Bank and will see the three companies drill rigs and accessories, operate and maintain the geothermal wells in Aluto, Ethiopia for a sum of $76.8 million.
The project is part of the government’s plan to generate more than 5,000 MW of geothermal energy in the coming years. Presently, the country produces 7.3 MW of geothermal energy, which is low considering the country’s potential. Its installation capacity is 685 MW but it’s unable to generate this amount because most of its rigs are faulty.
The longest section of the 7,000-Km East African Rift Valley lies in Ethiopia. Subsequently, the country has a potential of producing 10,000 MW of geothermal energy.
The two companies were awarded the contract in December last year after their representatives successfully bid for the project.
During the contract signing ceremony, EEP Chief Executive Abraham Belay said Ethiopia had tried to explore geothermal development in efforts dating back to 1981 but was yet to make any meaningful breakthrough.
“Currently, we have some geothermal drilling rigs that are idle and now broken down and therefore the need to purchase new ones, “he said.
Rebecca Miano, the managing director at KenGen was optimistic about the new deal with Ethiopia.
“As we extend our services to Ethiopia, we’re leveraging on our expertise, in-depth knowledge of the African Rift Valley and close to four decades of successful drilling experience.” She said.
EEP said the three companies will start by drilling 22 wells to determine the energy potential in the areas before upscaling their activities.
Despite its huge geothermal potential, Ethiopia is yet to match its neighbor, Kenya that has an installed capacity of generating about 630 MW of geothermal power.
Geothermal energy is categorized as clean energy although it requires a huge start-up cost. But its benefit is apparent.