Aluto- Langano Geothermal Project

PROJECT DESCRIPTION:

Ethiopia is endowed with large renewable energy resources and the government is tirelessly working to generate electricity from hydropower, geothermal, wind, solar and other renewable energy sources. The total installed electricity generation has reached over 4,500 MW.

The Aluto–Langano Geothermal Power Generation Project is intended to generate electric power from geothermal energy resources. The project will support the government’s efforts to develop the legal, institutional, and regulatory framework needed to ensure sustainable geothermal development in Ethiopia. It is expected to generate about 70MW of electricity.

The design of the project has considered international best practice and it mitigates the geothermal resource risk, links the power plant construction from identifying steam, and increases the internal rate of return of the electricity generation phase.

Aluto geothermal field has been selected based on available research. Moreover, in addition to two exploration wells financed by the World Bank, a total of 12 wells of about ≥2,500 meters each in depth will be drilled to produce geothermal steam. A steam-gathering system connecting all active wells also forms part of the first phase. To support the drilling operations and allow the country to build capacity in upstream geothermal development, the project will procure two modern drilling rigs with all accessories and spare parts. The World Bank funding will be utilized to complete the first phase of activities.

PROJECT LOCATION:

Ethiopia, Oromia Region, East Shoa Zone, Adami Tulu-Jido Kombolcha woreda, the main Ethiopian Rift Valley area

LEAD AGENCY/ PROJECT PROMOTER:

Ethiopian Electric Power – Project Implementation Unit

CURRENT STATUS/ STAGE OF PROJECT:

Procurement Status

• Two new drilling rigs with accessories have been procured.
• Water supply works, Civil and Infrastructure works for the drilling operation have been carried out.
• The Consultant (project engineer) has been hired.

Drilling Operation Status

• The drilling operation has been under way since 29 May 2021. Eight wells were drilled and two more are currently being drilled. The aim is to drill a total of 12 wells by December 2023.
• Well testing (discharge testing) for 4 wells was completed with total output of 21.0 MW and average of 5.25 MW per well.
• Well testing with geochemical monitoring for two wells is completed and ongoing for the remaining wells.

ACTIONS REQUIRED/ IMPLEMENTATION ARRANGEMENTS/ CONTRACT TYPE:

• A full-service drilling contractor has been hired on a daily rate basis, to perform the procurement of consumable and the well drilling and testing operations.
• A civil construction company has been contracted on a lump sum basis to perform the civil works.
• A civil construction company has been contracted to build the water supply system including pump stations, pipeline and storage tanks.

AVAILABILITY OF PRE-FEASIBILITY STUDIES, FEASIBILITY STUDIES, AND OTHER STUDIES:

• Feasibility studies are available.
• A project concept report has been prepared.
• A resource assessment study has been conducted.
• Project economic viability was assessed in September 2022.
• Resource assessment study and economic viability assessment to be updated at the end of GSDP (end of 2023).

ESTIMATED COST OF THE PROJECT:

USD 243 million

INVESTMENT REQUIRE:

USD 218.5 million

PROJECT FINANCIAL POSITION:

Project financier: The World Bank, Government of Iceland and Government of Ethiopia