Ethiopia has contracted a consortium of Chinese and Kenyan companies to drill steam wells as the country accelerates plans to exploit its vast geothermal resources.

The $76.8-million contract has been awrded to China’s Shandong Kerui Group and Kenya Electricity Generating Company (KenGen) and will entail the drilling of wells for the Aluto-Langano geothermal power station, as well as rig operations and the maintenance of the wells.

The project will be financed by a loan that has been extended by World Bank to the Ethiopian government.

The Aluto-Langano plant, to be built at a cost of $220-million, is expected to generate 75 MW of energy from eight wells.

“As we extend our services to Ethiopia, we are leveraging our expertise, in-depth knowledge of the East African Rift Valley and close to four decades of successful drilling experience,” says KenGen MD Rebecca Miano.

She adds that the contract puts the company on the path towards revenue diversification and also opens avenues for Kenya to share its home-grown geothermal skills with its neighbours.

Ethiopia has massive potential for geothermal energy, given that about 13% of its territory is located in the East African Rift Valley.

The longest section of the 7 000 km East African Rift Valley, which boasts an estimated geothermal potential of 10 000 MW and has identified 22 prospective sites for geothermal development, falls within Ethiopia’s borders.

By bringing KenGen on board, Ethiopia is hoping to emulate Kenya, which has managed to capitalise on its geothermal resources, which it uses to generate 690 MW of electricity.

“We will be delighted to have KenGen build the capacity of our people to manage the equipment and run the power plants, even after it exits the sites,” says State-owned utility Ethiopian Electric Power CEO Abraham Belay.

The project will be implemented in two phases, with the first entailing the purchase of drilling rigs and the second the provision of drilling services.

KenGen will provide 30% of the funds for Phase 2 – about $6.2-million.