Terra Energy, based in Nevada in the United States (US), will set up a wind turbines assembly plant in Ethiopia and arrange the required financing, according to the agreement. A joint venture (JV) between Princeton Energy Group, Global Enterprise Engineering (GE2) Solutions, and Pacific Renewable Energy Consulting, Terra Energy is also to handle the technology transfer and manage the plant, it was agreed.
The agreement, which is valid for one year, was signed by Mehiret Debebe, chief executive officer (CEO) of EEPCo, and five representatives of Terra.
Among the Terra Energy representatives were two Ethiopians. Behailu Assefa (Eng), chief officer of Operations, and Dereje Abebe, director of Africa Operations, cofounded GE2 Solutions five years ago.
Debre Berhan Wind Farm, one of the seven wind energy projects EEPCo plans to implement in the next five years, is located in Debre Berhan, 130km north of the capital. It was initially estimated to be able to generate 100 MW in the power corporation’s plan. However, the projection was amended after another assessment showed it was possible to produce up to 400MW in the area, according to Mekuria Lemma, acting director of Corporation Planning for EEPCo.
“Terra Energy is expected to do a feasibility study, environmental impact assessment (EIP), and financial proposal during the contract year,” Mekuria told Fortune.
Close to 1,000 MW of the 8,000 MW to which the country’s power generating capacity is planned to increase over the next five years is estimated by EEPCo to come from wind energy.
Most of the materials for construction of the turbines, especially for wind projects, are to be sourced locally, as set forth in the power corporation’s five-year plan.
Terra aims to have components of towers, fabrication, forging, and castings supplied by local companies, according to its short-term sourcing plan included in the agreement.
“Our aim is to establish an assembly plant in the short-term and a manufacturing plant in the long-term,” Dereje told Fortune. “This will bring about technology transfer, import substitution, and, eventually, export.”
Construction of Ashegoda Wind Farm, located 20 km southwest of Mekelle, Tigray Regional State, and 763 km north of Addis Abeba, has already started. The first phase, to erect 30 MW of the planned total of 120 MW by 2011, is being done by Vergnet Groupe, a French company. It is financed by a loan of 287 million dollars; a mix of concessional and two types of commercial loans from Agence Française de Développement (AFD) and BNP Paribas, respectively.
The construction of another project, Adama Wind, located in Adama, 100km south of the capital, has been awarded to HydroChina Co, which is set to commence work in December 2010, according to Mekuria.
The feasibility study for Ayisha Wind Farm, with an estimated generation capacity of 300 MW, is being conducted by Elsewedy for Wind Energy Generation (SWEG), owned by Egyptian Elsewedy group; while that of Assela Wind, located in Assela, 175 km west of the capital, with an estimated capacity of 100MW, is being done by an Indian company.