By our staff reporter
Djibouti inaugurates its first ever green energy, maiden wind farm of the 60 MW Red Sea Power (RSP) that is expected to boost the country’s free trade zone development.
The project near Lake Goubet is linked to boost the overall capacity by 50 percent while averting 252,500 tonnes of CO2 emissions annually.
As revealed, the first significant international investment in the energy sector in Djibouti, the USD122 million project, which was inaugurated by President Ismaïl Omar Guelleh will create the country’s first Independent Power Producer (IPP) further setting a template for further private investment.
The investors responsible for the said project are now mulling an additional capacity of 45 MW of renewable energy.
For this complex project, the consortium of investors behind RSP include; Africa Finance Corporation (AFC), the Dutch entrepreneurial development bank FMO, blended finance fund manager Climate Fund Managers (CFM) and Great Horn Investment Holding (GHIH), an investment firm owned by a unit of the Djibouti Ports and Free Zones Authority.
Until now, Djibouti has been entirely reliant on power generated from fossil fuels, as well as hydro generated power imported from neighbouring Ethiopia. Critically for the East African nation, the new clean energy will spur industrialization, job creation and economic stability as Djibouti seeks to take advantage of its strategic location as a global transshipment hub.
With its extensive coastline and dedicated port facilities positioned strategically along the Red Sea and the Gulf of Aden, Djibouti has a central role to play in the global energy market.
The country has enough wind, solar and geothermal resources to triple existing capacity to at least 300MW. Leveraging its seaports to diversify the economy, Djibouti set out to build an industrial zone in 2017, sparking preliminary discussions on boosting energy capacity. The consortium for the wind farm was formed in 2018 and subsequently provided all-equity construction bridge financing via AFC, FMO, CFM’s Climate Investor One fund, and GHIH, which propelled the project to achieve financial close in a record 22 months. Construction kicked off in January 2020 and continued at pace despite the global supply challenges caused by Covid-era lockdowns.
The site’s 17 Siemens turbines each produce 3.4 MW, served by a robust 220 megavolt amperes (MVA) substation and connected by a 5km overhead transmission line to the local grid operator.
The electricity generated is to be sold under a long-term power purchase agreement to Electricité de Djibouti (EDD), the national state-owned utility. Using the project as a template for future IPPs, the Government of Djibouti is already working on several other plants for additional geothermal and solar capacity.
The project stands out as a demonstration of the use of innovative equity financing to accelerate development impact through de-risking, while showcasing the commercial viability of transformative projects in Africa, thereby crowding-in diverse capital sources, and enabling replication of similar projects at reduced financing costs.
EDD’s payment obligations under the power purchase agreement (PPA) were backed by a government guarantee, and in turn the government’s obligations were also backed by political risk cover provided by the World Bank’s Multilateral Investment Guarantee Agency (MIGA).
“Djibouti has abundant renewable resources for sustainable and clean energy production,” said Aboubaker Omar Hadi, Chairman of GHIH, adding, “Our aim is to be the first country in Africa to be 100 percent reliant on green energy by 2035. Investment in renewable energy infrastructure is the key to enabling our ambitions, and the inauguration of the groundbreaking Red Sea Power wind farm today is a major milestone. A reliable and cost-effective energy solution is vital to drive Djibouti’s infrastructure growth. With the development of Industrial Free Zones projects, we estimate that the country faces a projected demand of 3700 MW in the next decade. Tapping into renewable resources like solar, geothermal, wind and tidal is crucial to bridge this gap.”
Francois Maze, CEO of Red Sea Power, in accordance said, “Access to electricity is vital for business growth, job creation, education, healthcare, social services, and infrastructure. In a country currently served entirely by fossil fuels and electricity imports, large-scale renewable energy solutions are urgently needed to mitigate and increase resilience to climate change. Today’s inauguration is an important milestone in Djibouti’s aim to be entirely served by renewable energy sources by 2035.”
In addition to the new wind farm, the Red Sea Power partners have built a solar-powered desalination plant that was also inaugurated today. The plant will provide drinking water to villages near the farm. Some parts of Djibouti are currently experiencing a major national water crisis, with 20 percent of rural areas lacking access to clean water. Many households have insufficient water to meet basic needs, particularly during the dry season, resulting in widespread loss of livelihoods and income.
AFC holds a 51 percent majority stake in RSP; FMO and CIO of Climate Fund Managers hold 19.5 percent each while GIHH holds 10 percent.
Djibouti’s quest for wind power comes to life
Equatorial Business Group commence FAW Trucks supply
Equatorial Business Group (EBG) has announced that it has started supplying the 7th generation of FAW (First Automotive Works) trucks to the Ethiopian market.
According to the EBG Chief Executive Officer, Jabulani Ndabambi, “FAW Trucks provide solutions for every industry while offering great fuel economy to help control overall operating costs”.
During the presser, on September 14, 2023, the CEO pointed out that the program introduced products to the domestic market, and echoed that the trucks were modern, light and fast.
The successful supply has come as a result of the great partnership between the China FAW Group Corp. Ltd and EBG.
Digging for Gold: Allied injects 500M USD in Benishangul-Gumuz
By our staff reporter
Precious metal miner, Allied Gold announces that it has approved the expansion of the Kurmuk project in Ethiopia, earmarking a USD 500 million injection in a two-phase development plan.
The large scale miner, which received its license for mining and exploration at the Kurmuk Gold Mine (KGM) in Benshangul Gumuz, disclosed that Kurmuk is now projected as a 240, 000 ounce per year gold mine with all-in sustaining costs (AISC) targeted below USD 950 per ounce, with a strategic mine life extending for an initial 15 years.
“The expansion project will involve upgrading the processing plant’s capacity from 4.4 million tonnes a year to between 5.4 million tonnes and 5.7 million tonnes a year,” the statement issued in middle of this week revealed.
The expansion project will produce an average of nearly 275 000 ounce per year for the first four years and an average of 240 000 ounce per year over its mine life, “This compares favorably to the original project, which would have produced an average of 200 000 ounce per year with similar capital costs,” the company cited.
Allied noted that, by capitalizing on the deployment of existing major equipment owned by the company and relying on contractor mining, the expansion project would be developed with the same capital requirements as initially planned.
The project development capital would be spent from 2023 to 2026, funded by available cash on hand and cash flows from producing mines, with the first gold pour expected in the second quarter of 2026.
Allied has just completed a USD 267-million financing, including a significant investment from incoming management in the amount of USD 40-million, to which Chairperson and CEO Peter Marrone has anchored the investment of incoming management.
On Monday, September 11, Allied Gold was listed on the Toronto Stock Exchange (TSX).
Allied Gold and Allied Merger Corp, which was formed by Marrone and fellow former Yamana Gold executives, last week, completed a business combination and reserve takeover transaction.
“The commencement of trading on the TSX marks the final step as we complete our transition to a public company and embark on our next phase of growth,” Marrone commented.
“We are excited to have been part of this foundational event for the Company and are now positioned to execute our strategic vision, with a renewed commitment to delivering on our high-quality, organic growth profile and generating substantial value for our shareholders. Our goal is to evolve into a significant mid-tier next-generation gold producer and ultimately become a leading senior global gold producer,” he said.
The company mining site is 750 km west of Addis Ababa at Kurmuk Wereda of Assosa Zone about one hour drive from the regional capital Assosa.
The company has invested for the procurement of different production machineries to commence operation, while illegal miners had hampered the company activity.
As per the plan, the company will produce nine tons of gold per annum, which is the capacity that country currently has, for two decades and also targets to increase the volume to up to 11 tons.
Education Bureau places high emphasis on security as schools resume
By Eyasu Zekarias
Cognizant of the new academic year being on the horizon, the Addis Ababa City Administration Education Bureau has held discussions with principals and vice principals of all schools in the city regarding the beginning of the 2023/24 school year under the theme, “Mutual understanding for effective learning and teaching”.
On September 14, 2023, the education office that conducted the discussion, reflected upon the past academic year, including the pros and cons that were attached to the year. From the challenges raised, keenness particularly on security issues we looked into which stemmed from the country’s current situation.
According to Addis Ababa City Education Bureau deputy head, Wondimu Umar, the content and implementation of the document that was presented at the meeting cited that the security problems were observed in schools in 2022/23, were especially linked to, “Conflicts based on ethnicity and religion, which must be resolved.”
With regards to resumption, the normal teaching and learning works were said to begin on Monday, September 18, 2024.
Among other pertinent issues raised, Wodimu Umer stated that, “Last year, activities that defamed the reputation of teachers on various social media were noticed through the use of mobile phones by students, and this year, we will work to prevent this from happening again.”
In line with the start of the education program, the head of Addis Ababa Education Bureau Zelalem Mulatu told Capital, “In the 2023/24 academic year, by establishing a peaceful teaching and learning system in schools, we want students to get free and fair services. The goal is to ensure the quality of education by creating common thinking around the deficiencies encountered in 2022/23.”
In compliment, Lydia Girma , Head of Addis Ababa Peace and Security Bureau said, “In order to make educational institutions peaceful and stable, they have emphasized that no political or religious issues can be promoted in any schools so that they are not vulnerable to security.”
