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The Great Rift Valley countries in Africa have an enormous potential for geothermal energy. With Kenya, Djibouti and Tanzania already developing this potential, Ethiopia is getting serious about it too. Early this year, the Development Bank of Ethiopia announced that it will offer $20 million to kickstart geothermal energy production in the private sector, as part of a program funded by theWorld Bank. It is hoped that geothermal energy could help to bolster the nation’s hydroelectric power supply, which is threatened by predictions of decreased precipitation and droughts.


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Currently, Ethiopia relies largely on hydropower. With massive water resources in its high plains, Ethiopia has the capacity to generate up to 45,000MW of hydropower, the second highest capacity in Africa. Hydropowercurrently makes up 86% of electricity in the country. But predictions of decreased precipitation and droughts, partly due to climate change, make this over-reliance on one source of power too worrisome. And that is why the Ethiopian Electric Power Corporation is trying to diversity its power production using geothermal sources as well, to create a more stable supply of energy to the country. Ethiopia’s ambitious growth and diversification plan, which started in 2010, aims to increase the existing 2,174 MW generated by geothermal power production at least fourfold.
Last May, the World Bank granted Ethiopia $40 million to jumpstart the development of various renewable energy projects through the country’s private sector. Over the next 5 months, the Development Bank of Ethiopia will spend $20 million to help cover costs related to early exploration and drilling activities. When drilling comes to fruition, the bank will invite investors to lead geothermal projects and develop power plants around the country, and will help kickstart these projects with the remaining $20 million from the World Bank program.