Exemplary intra – African bond in tech-transfer

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From the inception to the implementation stages of many of the specialized development projects being carried out here, the technical and hi-tech parts of the work is usually undertaken by Europeans or Asian experts. The likelihood of finding Ethiopians or Africans executing such white-collar works has long been almost nil. A Major energy development deal signed last week, though, seems to challenge this notion and rendering it to be no longer valid.

The deal covered by the news is emblematic of the rise of intra-Africa co-operation in technology transfer. An African technology company helping a fellow African country to develop its resources. Specifically, Kenyan company participating in the development of the geothermal resources of neighboring Ethiopia.

Speaking of Geothermal energy, it is one of the natural resources Ethiopia is richly endowed with as proven by numerous studies. Thus, despite being a huge capital intensive area of investment, it remains to be one of the best bets of venture capitalists interested to work in Ethiopia.

The weekly Fortune has quoted senior experts that worked with the Ethiopian Geological Servey as saying: “There is a huge potential of the geothermal resource in Ethiopia. Ethiopia has an estimated potential of generating 45,000MW from hydropower, solar, wind, and geothermal sources. Geothermal power is not affected by drought unlike hydro and other types of resources. A special attractive feature of geothermal energy for investors is that it can be established on a small surface area. If Ethiopia utilizes this sort of energy, the country would have the ability to become a center of excellence in power generation.”

In today’s Ethiopia, opportunities are wide open for Expat investors to gain huge profit by harnessing the natural resources of the country to generate Energy and sell it to the government. One of the first two companies who embarked on realizing this potential is a French-Icelandic conglomerate, Tulu Moye Geothermal, TMGO.

According to the weekly The Reporter, TMGO has signed a power purchasing agreement on 19 December, 2017, with the Ethiopian government to develop and sell electric power from a geothermal power plant to be built in the Arsi zone, Tulu Moye locality near Eteya town, Oromiya state. The geothermal power plant company plans to build with a total investment of 800 million dollars would have an installed generation capacity of 150 MW. It is the second independent power project next to 50 MW Corbetti Geothermal, located near to the city of Hawassa, capital of the Southern Nations, Nationalities and Peoples state.

One of the executives of the companies financing TMGO was reported to have said: “Various studies have been undertaken to assess and secure the geothermal resources; now we are going to invest more in the new phase to confirm there is a good resource.”

Thus TMGO has taken its energy development endeavor to the next step by signing a contract with a company it selected to drill Geothermal wells at the Tulu Moye project. According to The Reporter, TMGO has awarded the drilling work contract to the Kenyan company, KenGen.

KenGen is a 70% state-owned company that is said to be one of the few profitable power companies in Africa and has rich experience in drilling geothermal exploration wells in the Great East African Rift Valley. This is not the first project for KenGen in Ethiopia. It has previously signed a contract with Ethiopian Electric Power (EEP).

The weekly Capital wrote: [KenGen]it has previously won a contract worth almost 77 mln USD with its partner, the Chinese company Shandong Kerui Oilfield Service Group, in April 2019, for the supply of equipment and the installation of 22 geothermal wells on the Aluto-Langano site located in the area between Lake Zeway and Langano, being developed by the state power generating and distributing company, Ethiopian Electric Power (EEP).

Fortune wrote that [on the new deal withTMGO,], KenGen is expected to carry out the drilling for phase I by drilling 10 wells, each with the capacity of producing 15 MW and two additional wells for the condensed water. However, the Kenyan company will not have a role in power generation activities

CEO of TMGO reportedly said that the contract signed with KenGen was 60 million dollars contract for the drilling of the twelve wells each 2,500 meters deep, and drilling works would begin in early January.

TMGO anticipates generating 50 MW from the first phase of the geothermal power plant scheduled for completion in September 2022, and the second phase will generate 100 MW. TMGO plans to supply 150MW of electricity to the national grid by 2024.

Capital has quoted CEO and Managing Director of KENGEN as saying “We have the most expertise in Africa and it is really impressive to work next door in Ethiopia. African countries should partners with each other as we have the knowledge and expertise, the equipment to do so many projects as manifested today.”

KenGen in Ethiopia, Ethiopian Airlines in Malawi, Zambia, and Chad these are exemplary and heartwarming moves in providing African solutions to African development needs, and steps toward realizing the long-held dreams of Pan- Africanism.  

The Ethiopian Herald Sunday Edition 3 November 2019

 BY SOLOMON WASSIHUN