ACWA Power, a leading international developer and operator of power generation and water desalination projects, signed two long-term power purchase agreements (PPA) with Ethiopia’s state-owned electricity producer Ethiopian Electric Power (EEP) for two 125 MWac solar photovoltaic (PV) projects at USD 2.526 cents/kWh over 20 years.
Implementation Agreements were also signed with the Government of Ethiopia, represented by the Ministry of Finance.
ACWA Power won the bid for the two PV plants of 125 MWac each during the first round of Ethiopia’s solar programme organised by the PPP-DG under the new PPP law, and signed a Letter of Intent with the Ministry of Finance and EEP in October 2019.
“Ethiopia has highly ambitious growth plans that require a reliable, secure and affordable supply of energy. Our focus is to expand our renewables capacity and we are confident that ACWA Power’s leadership and international expertise in this sector will benefit us significantly. We are proud to be working with ACWA Power on the lowest-tariff project in Africa. We believe this partnership will aid us tremendously in creating long term sustainable value for our nation and communities,” said Ato Ahmed Shide, Ethiopia’s Minister of Finance.
“The two projects are key to strengthening our renewable energy delivery. Though the first under the public-private partnership framework, we believe that they will set the stage for future collaborations in the Ethiopian energy sector. With the PPAs in place we are confident of achieving the development and implementation of these two solar projects in a timely manner and securing sustainable power to meet our growing demands,” said Tilahun Haile, Director of Ethiopia’s Public-Private Partnerships Directorate General (PPP-DG) of the Ministry of Finance.
“With a combined capacity of 250 MWac, the PV projects are estimated to power 750,000 homes in Ethiopia and offset 320,000 tonnes of carbon dioxide per year. The new plants will be located in Dicheto, in the Afar region, and in Gad, in the Somali region of the country,” said Paddy Padmanathan, President & CEO of ACWA Power.
The signing of the PPAs is of great importance and signifies the confidence that the Ethiopian government has in our ability to support their energy building ambitions. We are pleased to have been selected to deliver the first projects to be tendered under the new public-private partnership framework in Ethiopia.
As a leader in the renewable energy sector, we are confident that our expertise will help support the government in achieving its goal of increasing the electricity generation capacity from the current 4,300 MW to 17,300 MW by 2020
“The 250MWac projects are the first of a kind in the Ethiopian utilities landscape and will be a support the diversification of the energy mix within the country.” Padmanathan added.
“This partnership is a strong reflection of the Ethiopian government’s trust in ACWA Power’s expertise and business model. Our strategy to provide low tariffs not only cements ACWA Power as the partner of choice, but is a reinforcement of our ability to help sustain the nation’s positive economic growth and improve living standards by providing safe and affordable access to electricity,” said Rajit Nanda, Chief Investment Officer of ACWA Power.
ACWA Power was selected as the winning bid out of 12 pre-qualified bidders. While these solar projects will be ACWA Power’s first venture in Ethiopia, the company already operates in Africa with solar and wind assets in Morocco, South Africa and Egypt, fuelling the power needs of respective communities.