MIGA increases guarantees for 50-MW geothermal project in Ethiopia

The Multilateral Investment Guarantee Agency of the World Bank (MIGA) has increased the guarantees for a 50-MW geothermal project in Ethiopia, representing the first phase of a planned 150-MW greenfield geothermal power plant.

The guarantees were issued in 2021 to Tulu Moye SAS of France to cover its equity and quasi-equity investments in Tulu Moye Geothermal Operations Plc, the Ethiopian company building the geothermal power plant in Oromia Regional State, against the risks of breach of contract, expropriation and war and civil disturbance for a period of up to 15 years. The original sum of USD 67.5 million has now been increased to USD 117 million (EUR 108m), MIGA said on Wednesday.

The project involves the design, development, construction, operation and maintenance of the 50-MW phase one, which will sell its generation to state-owned utility Ethiopian under a 25-year power purchase agreement. The facility will help Ethiopia diversify its energy resources beyond hydropower, which makes the country susceptible to droughts.

Phase one is planned to be operational by the end of the year. The second phase calls for the development of 100 MW over the next five years.

MIGA said it also used the IDA Private Sector Window MIGA Guarantee Facility, which provides a shared first loss layer of up to USD 40.95 million, of which IDA’s share is USD 32.76 million.

(USD 1 = EUR 0.922)

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