Ethiopia could earn up to $5bn a year from the mining sector and by tapping geothermal energy sources, according to a ‘Strategic assessment of the Ethiopian mineral sector’ commissioned by the country’s government with assistance of the World Bank.
In the report, the Geological Survey of Ethiopia and private companies revealed that Ethiopia’s mineral landscape harbours a vast array of unpotentiated possibilities.
Tolosa Shagi, Ethiopian Minister for mines, said the country had already secured “more than $2.3bn from exports of minerals” over the past four years, and that he expects returns to double with more investment in the sector.
Exploratory activities indicate that “Ethiopia is endowed with a favourable geological environment that hosts a wide range of mineral and geo-energy potential,” he continued.
At present, more than 130 companies are working in solid minerals operations and oil and gas activities in Ethiopia, Shagi said, but the effective future development of the sector will require firm progress in implementing transport infrastructure and accountability systems.
In terms of geothermal developments, Iceland is unsurprisingly a choice partner, and in June the African Union and Icelandic-US firm Reykjavik Geothermal signed an $8m grant contract to drill initial wells for the first phase of a major geothermal project at the Corbetti Caldera.
The ambitious scheme blueprints the construction two 500MW phases over the next decade at a total cost of $4bn – the largest foreign direct investment in the country’s history – according to Reykjavik Geothermal, comprised of 75% debt financing and 25% equity.
The Icelandic firm has additionally been awarded licenses to carry out geothermal exploration in an area spread across more than 6,500km2 in the Central Ethiopian Rift, where temperatures of 350°C have been already recorded over an area of at least 200km2.
“The shortfall in the power sector has been identified as a major impediment to the continued growth of Ethiopia, and the Corbetti concession is in a densely-populated area with good road access and at the heart of the national electric grid,” Reykjavik added.
Construction of the first phase is scheduled to commence in the first quarter of 2015.