Ethiopia will receive $10 Million investment as a concessional loan, AfDB confirmed last week. The Investment will be used towards financing Ethiopia’s 50MW Tulu Moyo Geothermal power plant. Funding for the loan will come from the $8.5 billion Climate Investment Fund through the Clean Technology Fund (CTF). The Investment Fund pools funds from donors and Multilateral Development Banks.
What’s more, the construction of the power station is under a Build, Own Operate, and Transfer System (BOOT). It will receive an additional investment of $239 million in co-financing with private partners. AfDB has Invested a senior loan of $82 million with 38 months grace period.
This investment will make CTF the first geothermal IPP in Ethiopia. Furthermore, CTF being a private investor, will provide a risk base ground and hopefully attract private investment in Ethiopia’s renewable energy, including its local financial institutions.
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
Leandro Azevedo, Principal Climate Finance Officer and CIF coordinator at the African Development Bank
The 3-phased Tulu Moyo project will cumulatively produce 150MW by 2024, include the construction of a substation and an 11 km transmission line. Additionally, it will create a little over 500 jobs to its local communities as well as reduce greenhouse gas emissions equivalent to 10 million tons CO2 over the project lifetime.
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