The Saudi Arabian power company that just one month ago won a contract to develop two solar farms, which will have 250MW in combined capacity, has already commenced mobilizing for the project. ACWA Power, which will develop a power plant with its own 300 million dollars in financing, started clearing the two sites and hiring employees that will engage in the development of the projects. One of the projects, Gad, is located 40Km from Dire Dawa in Somali Regional State, while the other project, Dicheto, is found 90Km from the town of Semera, close to the border with Djibouti in Afar Regional State.
The agreement for the two projects was signed early last week between Ahmed Shide, minister of Finance and the chairperson of the Private Public Partnership (PPP) Board, and Paddy Padmanathan, CEO and President of ACWA. Ethiopian Electric Power has also joined the two parties in signing the contractual agreement that will last for 15 to 20 years. The Saudi Arabian firm will develop the two solar farms on the land provided by the government of Ethiopia. The company won the bid after vying with four other companies that made it into the screening stage. Initially, a total of 12 pre-qualified prospective bidders took part in the bidding process after being shortlisted by the board of the PPP directorate.
A Saudi Arabian firm, ACWA Power, has won a USD 300 million worth solar Public Venture (PV) contract, becoming the first private company to win a mega project under the Public Private Partnership (PPP), after the PPP Board of Ethiopia approved the bid summited by the firm. The board approved the first round of the solar project to ACWA Power for the Gad and Dicheto Solar PV projects, in a meeting held on Wednesday. The company was one of 12 companies that summited their respective Request for Proposal (RFP) last February.
The site, which is located in Somali and Afar regional states, respectively, will generate a total of 250MW. Out of the 12 shortlisted companies, seven of them have visited the site and attended a bidder’s conference. Consequently, five have submitted their proposals and out of the five bidders, the Saudi Arabia-based company has qualified for the technical and financial requirements of the bid. According to information obtained from the Minister of Finance (MoF), the Company has offered 2.5260 US cents/kwh for both sites. Currently, this solar power purchase tariff is the lowest in Africa and one of the lowest tariffs globally.
A Saudi Arabian energy company , ACWA Power is ahead of the competition in a bid to win a deal with the Ethiopian government to build an industrial scale solar park, which will be the first of its kind for the country. If awarded, the company will bring in its own financing to build solar power plant in two locations, each generating 125MW of power that will be sold to Ethiopian electric power, EEP.
ACWA Power placed its financial offer of 0.025 dolars a kilowatt-hour on Friday, September 5, 2019, through the independent power purchase agreement framework. Four other international power companies bidding against ACWA Power were excluded due to non-compliance with the requirement. On Tuesday, they were issued letters of notice by the public private partnership directorate, under the ministry of finance.
Ethiopia is the world’s third largest potential market for solar products but also one of the most challenging. PAYGO solar product providers have traditionally found it difficult to penetrate the 60 million people off-grid population lacking access to energy due to several factors:
Shell Foundation, with co-funding from DFID and USAID, worked with Belcash, the leading mobile money provider in Ethiopia, to accelerate the availability of PAYG energy solutions in the country, co-creating a new enterprise called HelloSolar.
HelloSolar has looked to leverage BelCash’s agent network, brand presence and MFI partnerships to scale the sales and distribution of affordable and high-quality PAYG solar home systems in two regions. They concentrated efforts on informing the customers of the products and the after-sales requirements around installation, payments and maintenance. This early pilot report shows positive results of providing tailored payment plans and using an agent-led sales model, with 82% satisfaction levels among their new customers.
Download the report below.
Source: Africa Energy Platform, AEP