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ACWA Power offers African record low $0.02526/kWh for Ethiopian projects

CategoryPress Releases
TagsEnergy Access, Renewable Energy

Ethiopia has concluded the tender process for the first round of its Scaling Solar program. The winning bid is the lowest in the continent to date, according to the finance ministry.

Ethiopia’s Public-Private Partnerships Directorate-General (PPP-DG) has selected Saudi Arabian firm ACWA Power to build the Gad and Dicheto solar projects. Each will have a 125 MW generation capacity and the solar farms will be developed in Ethiopia’s Somali and Afar regional states, respectively.

The winning final price bid for the electricity generated by the projects was $0.02526/kWh, which applies to both facilities and is the lowest ever tariff for a PV project in Africa, and among the lowest in the world.

The PPP-DG had identified 12 potential bidders in the first stage of the tender process. They were invited to submit requests for proposals by the end of June. “Seven have visited the site and attended [a] bidder’s conference,” said the Ethiopian finance ministry at the time. Five eventually submitted bids, which were judged on the developers’ “experience, expertise and financial resources to rapidly deliver the solar PV PPP [public-private partnership] projects”. 

Confidence vote

With ethnic tensions frequently roiling Ethiopia’s political environment, securing such a low price for solar electricity is a vote of confidence in Sahle-Work Zewde’s reform-minded government.

The nation’s solar program follows the Scaling Solar initiative of the World Bank and its private finance arm the International Finance Corporation, adding to investor confidence.

Investors who attended the Africa Energy Forum held in Lisbon in the summer suggested new solar in Africa could be viable at $0.09/kWh but the ACWA projects hugely undershot that figure.

Next tender aims for 750 MW of solar 

Ethiopia is currently conducting a second Scaling Solar tender to secure a further 750 MW of solar capacity. The PPP-DG had originally intended to procure 500 MW of capacity across four projects at Weranso, Welencheti, Humera and Mekelle but then added facilities at Metema/Bahir Dar and Hurso to raise the scale of the exercise.

Consequently, the May 29 pre-qualification stage deadline was extended to July 9. Qualified investors will next be invited to take part in a request for proposals round to submit their financial bids.