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Enel, Orchid to develop renewable energy in Ethiopia

Enel, Orchid to develop renewable energy in Ethiopia

Enel Green Power, a leading European renewable energy developer, has partnered with Orchid Business Group, a well-known Ethiopian investment conglomerate, to develop renewable energy resources in Ethiopia.

Enel Green Power is a subsidiary company of Enel Group established in 2008 in Rome, Italy. Enel Green Power develops renewable energy sources including hydro, solar, wind and geothermal energy sources in Europe, the US, Central and South America and Asia. It has also started operations in Africa. Currently, the company is trying to enter the Ethiopian market.

In the sidelines of the Renewable Energy Solution for Africa (RES4Africa) Conference held on October3-4 at the Sheraton Addis, Antonio Cammisecra, CEO of Enel Green Power, told The Reporter that Enel Green Power has partnered with a local investment company, Orchid Business Group, to develop renewable energy resources in Ethiopia.

Cammisecra said that Enel Green Power is participating in the tender put up by the Ethiopian Electric Power (EEP) to develop a 100MW solar energy plant in Metehara town, Oromia Regional State. Enel Green Power hopes to develop the solar power plant in collaboration with Orchid Business Group.

“We started working with Orchid Business Group a year ago. They have a minority 20 percent share. They will also be the contactor to build the solar power plant, if we win the project,” Cammisecra said.

Orchid Business Group PLC is an Ethiopian company primarily operating in the areas of infrastructure, construction and logistics. The company was established by a renowned Ethiopian businesswoman, Akiko Seyoum, 15 years ago.  

Enel Green Power has picked up Orchid Business to develop the 100MW solar power plant. EEP put up a tender in February 2017 inviting international and local firms to build-own and operate a 100 MW solar energy power plant in Metehara town. Enel Green Power is among the list of companies that submitted its technical and financial proposals. The result of the bid is expected to be announced this month. 

Apart from Enel Green Power, Fotowatio Renewable Ventures B.V. (FRV), Meridiam-Solairedirect Consortium, The Building Energy S.P.A. Consortium, and CCE Oasis Technology Corporation are vying to win the multimillion dollar solar energy development project.

Cammisecra said that if his company wins the tender it will take less than 24 months to complete the project. “We will sign the Power Purchasing Agreement. It may take 14 months to build and generate power. Our local partner, Orchid, will co-invest in the project. They will also build parts of the plant. If they do well in this project, they will continue working with us in other projects,” he said. Cammisecra estimates that the solar project could cost 120 million dollars.  

Enel Green Power appreciated the Ethiopian government’s effort to diversify Ethiopian energy resources. “You get 90 percent of the electric power from hydro and if you have a drought you will face a problem. So you need to diversify your power source. And your government officials know this very well. That is why they started the solar project.”

Cammisecra is satisfied with the tender process but unhappy about the prolonged time it took to reveal the results of the bid. “We are very happy with the interaction with EEP even before the tender. They are doing the bid in a very transparent manner. The only disappoint we have is with the delay.”

Mekuria Lemma, investment and strategy director with EEP, told The Reporter that the bidding process took a long time because Ethiopia is new to power purchasing agreement. “This is the first time that we are dealing with independent power producers. It is a new development for our country.” Mekuria said the result of the bid would be announced soon.

The company has also reached the prequalification stage for two more solar project tenders in the country – Humera and Mekelle – each for 100MW of photovoltaic capacity, and is awaiting the launch of the Scaling Solar programme under the aegis of the World Bank, for a total expected capacity of around 500MW. EEP plans to develop a total of 800MW of solar energy in the second Growth and Transportation Plan (GTP-II).    

Enel Green Power has also qualified to build a 280MW hydro power plant in Ethiopia. The company is also interested in developing wind and geothermal power projects in Ethiopia. “The geothermal resource in Ethiopia is very good. But the government has to invite major geothermal companies may be through tender. Then we can participate in the bid. Ethiopia also has a very good wind resource. We will undertake a study on wind projects.” 

Enel Green Power makes an annual profit of four billion euros. Enel Group has been working on energy generation in Europe for the past 100 years. Enel Green Power spun off from Enel Group to focus on only renewable energy solutions in 2008. The company manages 40GW of renewable energy in different parts of the world.

Recently, Enel Green Power has set its foot in Africa. Enel Green Power has been awarded an 850MW wind farm development project in Morocco and 40MW solar project in Zambia. In South Africa, Enel Green Power participated in renewable energy procurement program and today it is operating 520MW of power plant in that country and plans to develop additional 700MW.

More than 450 delegates participated at the launch of RES4Africa Ethiopia Program held with the theme “Fostering the Deployment of Renewable Energy in Ethiopia: a Sustainable Roadmap.” During the two day conference European Union, European Investment Bank and IFC have pledged support to renewable energy development in Ethiopia. Several European companies have also expressed keen interest in engaging renewable energy development projects.