The Corbetti geothermal power plant is being developed in multiple phases. Image courtesy of USAID.
Corbetti geothermal power project is Ethiopia’s first privately financed large-scale power venture. Image courtesy of USAID.
The first phase of the project is expected to commence operations in 2020. Image courtesy of USAID.

Corbetti geothermal power project is a is a large-scale project being developed in the Corbetti Caldera region of Ethiopia. Estimated to cost $4bn, it is the first privately financed venture.

Development of the project commenced in 2011 by Reykjavik Geothermal, which attained the necessary concessions and licenses from the Ethiopian authorities. In 2014, Berkley Energy and Iceland Drilling joined the project followed by InfraCo Africa in 2015. Berkley Energy owns majority interest in the project through the Africa Renewable Energy Fund.

The three investors established a new energy company named Corbetti Geothermal to develop the project in multiple phases.

The project is being developed as part of the Power Africa Initiative, which aims to add 10GW of cleaner energy to six countries on priority in sub-saharan Africa. It is expected to have a capacity of more than 1,000MWe. The first of the project is expected to commence operations in 2020.

Corbetti geothermal power project location

The Corbetti site was identified by the United States Agency for International Development (USAID), as a priority for power development in Ethiopia. The project is being built in Corbetti Caldera area, which is located 250km south of Addis Ababa, near the Hawassa town.

The Corbetti concession is part of the southern Lakes District basin, which is a part of the greater hydro-geological system situated in the central Main Ethiopian Rift and at the centre of Ethiopia’s national electric grid.

Geothermal exploration licenses were acquired for more than 6,500km² in the Corbetti concession area by 2013 for the development of natural energy resources. Scientists chose a 200km² area within this concession area, which has temperatures up to 350°C with a potential to generate between of 500MWe and 1,000MWe a year.

“The Corbetti geothermal project is being developed as part of the Power Africa Initiative.”

Corbetti geothermal power project development details

The first phase, which is a pilot phase, is fully equity-funded and includes the drilling of up to six exploratory wells for the development of a 10MW power plant. It will also evaluate the viability of the resource along with exploration of a power purchase agreement.

Drilling and exploration activities commenced in the first quarter of 2014 and continued for approximately eight months. The preliminary work and feasibility studies were completed before the commencement of the first drilling.

The phase involves drilling of re-injection wells, construction of a water pipeline, water extraction wells, and an access area. The installation of two 5MWe wellhead generation plants, and a substation is also part of the project.

State-owned utility Ethiopian Electric Power is building a 15km-long transmission line for transmission of power from the plant to the national grid.

Phase two of the project will involve the drilling of up to 13 more wells and the addition of a 50MW commercial-scale power plant along with supportive facilities.

Based on the results from the first two phases, subsequent phases will increase the installed capacity of the power plant to 500MW by raising $2bn in foreign direct investment, and subsequently to 1,000MW by 2030.

Financing for Corbetti

The project is planned to be developed through equity financing of 25% and debt financing of 75%. The first phase is fully equity funded, while the second phase will be funded through debt financing.

InfraCo Africa provided an equity investment of $15m in September 2015, out of which, $5m is planned for use towards early-stage site development and the remaining $10m towards exploration drilling.

An additional $15m of equity investment was provided by the company in January 2018. The funds will contribute towards 20% of the funding required for drilling of exploratory wells and development of the pilot power plant.

The project has also received funding under the European Union-Africa Infrastructure Trust Fund’s Geothermal Risk Mitigation Facility, UK Department for International Development’s East Africa Geothermal Energy Facility, USAID’s Power Africa initiative and African Development Bank Group’s African Legal Support Facility.

Power purchase agreement

Corbetti Geothermal, the government of Ethiopia and the Ethiopian Electric Power Corporation  entered a power purchase agreement (PPA) for the power plant in December 2017.

Corbetti Geothermal will deliver up to 520MW of renewable power to Ethiopia’s national grid, as part of the PPA.

Contractors involved with Corbetti geothermal power project

Rama Construction was contracted to construct 6km of road, drilling pipeline and 11km of water pipeline.

The Verkis-Mannvit consortium was appointed by Reykjavik Geothermal and Corbetti Geothermal as owner’s engineer for the project in 2014. The scope of work includes preparation of tender documents, consulting services and PPA contracting.

The contract for the geothermal drilling on the project site was awarded to Mannvit.

Overview of the Ethiopian geothermal power market

Shortfall in power supply is a major hindrance to Ethiopia’s growing economy. The country is exploring renewable energy resources to power its households and commercial activities.

Ethiopia has abundant and easily accessible resources, which can be utilised for promoting environmentally safe energy. The nation aims to generate 25,000MWe from renewable sources by 2030, of which 1,000MWe is aimed to be generated from geothermal power.