TULU MOYE GEOTHERMAL IPP PHASE I

Promoter – Financial Intermediary

MERIDIAM SAS,REYKJAVIK GEOTHERMAL LTD

Location

• Ethiopia

Description

Construction of a 50 MW geothermal power plant as a privately developed Independent Power Producer (IPP) in Tulu Moye, Oromia State, Ethiopia, that will provide a capacity increase and diversification of energy resources in Ethiopia.

Objectives

Investment in geothermal energy will help reduce power outages and meet the rapid growth in demand, and with lower greenhouse gas (GHG) emissions than fossil-fuel-based alternatives, thereby supporting the sustainable economic development of Ethiopia. The project contributes to EU renewable energy and environmental policies (particularly climate change policies) and several Sustainable Development Goals (SDGs), especially SDG 7 - access to affordable and clean energy.

Sector(s)

• Energy - Electricity, gas, steam and air conditioning supply

Proposed EIB finance (Approximate amount)

USD 59 million (EUR 49 million)

Total cost (Approximate amount)

USD 271 million (EUR 228 million)

Environmental aspects

If located in the EU, the project would fall under Annex II of the EU EIA Directive, requiring a screening decision by the competent authority. In accordance with the Ethiopian Environmental Impact Assessment Proclamation 299/2002, an Environmental and Social Impact Assessment (ESIA) has been carried out, covering the impacts of constructing a 100 MW power plant with associated drilling, steamfield collection and grid connection. The ESIA, which also includes the results from the public consultation and participation, was approved by the Ministry of Water Irrigation and Energy in June 2018 and received clearance in accordance with the Federal Environmental Protection Authority. The key potential adverse impacts identified are involuntary resettlement owing to land use change, noise, air quality, archaeology and cultural heritage sites, landscape and wildlife. The Bank will assess environmental and social aspects during appraisal to check alignment with EIB Environmental and Social Standards. In particular, the Bank will review that appropriate public consultations have been carried out during the ESIA process as well as request a Stakeholder Engagement Plan at the level of the project, inclusive of a Grievance Mechanism. Environmental and social impacts of the project, inclusive of the transmission line, will be appraised in accordance with the Bank's environmental and social standards.

Procurement

The exploration license has been, and the geothermal well-field development and use license is expected to be, awarded to the Promoter on an exclusive basis. In the absence of competition related to the award of the exploration and operating licenses, the PPA will be reviewed to assess whether it is economically reasonable in terms of price, quality and risk-sharing and the works, goods and services covered by the Bank's financing will be considered as operations in the public sector from a procurement perspective as defined in the EIB Guide to Procurement. The Bank will ensure that implementation of the project will be done in accordance with the Bank's Guide to Procurement.

Status

Under appraisal - 20/03/2019