Ethiopia kicks off construction of $300m solar power plants

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ETHIOPIA has commenced the construction of two solar power plants, which will have a combined capacity of 250MW. The Saudi Arabian power company, ACWA Power, which will develop the power plants with its own $300 million financing, has already started mobilising for the project.

The power company started clearing the two sites and hiring employees that will engage in the development of the projects.

The solar power project

One of the projects, Gad, is located 40Km from Dire Dawa in Somali Regional State, while the other project, Dicheto, is 90Km from the town of Semera, close to the border with Djibouti in Afar Regional State. The agreement for the two projects has already been signed by Ahmed Shide, Minister of Finance and the chairperson of the Private Public Partnership (PPP) Board, and Paddy Padmanathan, CEO and President of ACWA.

Ethiopian Electric Power has also joined the two parties in signing the contractual agreement that will last for 15 to 20 years. The Saudi Arabian firm will develop the two solar farms on the land provided by the government of Ethiopia.

Bidding process

EDF Group from France, Enel Green Power from Italy, Globe Elec from the United Kingdom, and a consortium of Abu Dhabi and Belgian firms, Al-Nowais, were the other shortlisted companies to bid after meeting the term sheet and the financing terms. ACWA secured the project after fulfilling the requirements that include bankability and financial capacity. The other companies could not raise their own investment funding, a request by the Ministry.

Coming with its own financing, ACWA offered 0.025 dollars a kilowatt-hour to sell the power it will generate from the two farms to Ethiopian Electric Power. After buying the power from ACWA, EEP will distribute it to users from the national grid at its own tariff.

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