Gad Solar PV Project – Ethiopia’s Renewable Energy Milestone

Ethiopia is taking a significant step towards a clean energy future with the Gad Solar PV Project—a 125 MWac solar power plant in the Somali Regional State. This $132.6 million project will contribute to Ethiopia’s energy diversification, reducing reliance on fossil fuels and strengthening the national grid. The project is part of Ethiopia’s Public-Private Partnership (PPP) framework and is being developed under a Build-Operate-Transfer (BOT) model.

With ACWA Power as the winning bidder, agreements have been signed with Ethiopian Electric Power (EEP) and the Ministry of Finance (MoF), marking a major milestone in Ethiopia’s renewable energy expansion. This article explores the technical, financial, and social aspects of the Gad Solar PV Project and its long-term impact on Ethiopia’s energy sector.

Overview of the Gad Solar PV Project

Gad Solar PV Project – Ethiopian Renewable Energy

Project Capacity and Infrastructure

The Gad Solar PV Project will consist of a solar photovoltaic (PV) power plant with a total generation capacity of 125 MWac. The project will utilize up to 236 hectares of land for solar panel installation, ensuring maximum efficiency in electricity generation.

Transmission and Connectivity

The power generated from the Gad Solar PV plant will be transmitted through a newly built High Voltage (HV) transmission line, connecting to the existing Dire Dawa substation. This will help integrate the clean energy supply into Ethiopia’s national grid, improving power distribution across the country.

Investment and Financial Aspects

Total Project Cost and Funding

The total estimated cost for the Gad Solar PV Project is $132.6 million. The project follows a Public-Private Partnership (PPP) model, ensuring efficient financing and execution. Under this model, private investors share the financial burden with the government while bringing advanced expertise and technology.

Procurement Process and Bidding

The project was awarded through competitive bidding under the BOT (DBFOM) structure—meaning ACWA Power will Design, Build, Finance, Operate, and Maintain the plant before eventually transferring it back to the Ethiopian government. This model ensures that Ethiopia benefits from global expertise and innovation in solar energy.

The Role of ACWA Power and Ethiopian Electric Power (EEP)

Key Agreements Signed

The project has now reached an implementation phase, with two crucial agreements signed:

  1. Power Purchasing Agreement (PPA): Signed between ACWA Power and Ethiopian Electric Power (EEP), ensuring long-term power supply at agreed tariffs.
  2. Implementation Agreement (IA): Signed with the Ministry of Finance (MoF) to formalize investment terms and regulatory requirements.

Regional Impact and Benefits

Job Creation and Economic Growth

The Gad Solar PV Project is expected to generate numerous job opportunities in the Somali Regional State during its construction and operational phases. It will:

  • Create direct employment in engineering, construction, and maintenance.
  • Support indirect job growth in logistics, transportation, and local services.
  • Stimulate economic development by attracting further investments in the renewable energy sector.

Contribution to Ethiopia’s Renewable Energy Goals

The project aligns with Ethiopia’s Green Legacy Initiative and its commitment to achieving climate-friendly energy solutions. Key benefits include:

  • Reducing dependence on fossil fuels by generating clean, solar energy.
  • Increasing electricity access for businesses and households.
  • Supporting Ethiopia’s goal of becoming a regional leader in renewable energy.

Current Status and Future Outlook

Timeline and Expected Completion

The Gad Solar PV Project has already been awarded, and the necessary agreements have been signed. The next phases involve:

  • Finalizing financing agreements.
  • Completing construction and grid connection.
  • Achieving full operational status within the proposed 20-year partnership period.

FAQs About the Gad Solar PV Project

1. What is the capacity of the Gad Solar PV Project?

The project will generate 125 MWac of electricity, making it one of Ethiopia’s largest solar initiatives.

2. Where is the project located?

The project is located in the Somali Regional State and will connect to the Dire Dawa substation.

3. How will the project be funded?

The estimated $132.6 million investment follows a Public-Private Partnership (PPP) model, with ACWA Power leading the development under a BOT (DBFOM) structure.

4. What is the role of ACWA Power in this project?

ACWA Power is the winning bidder responsible for designing, building, financing, operating, and maintaining the solar plant for a 20-year period before transferring it to the government.

5. What agreements have been signed for the project?

Two major agreements:

  • Power Purchasing Agreement (PPA) with Ethiopian Electric Power (EEP).
  • Implementation Agreement (IA) with the Ministry of Finance (MoF).

6. How will the project impact Ethiopia’s energy sector?

The project will increase clean energy supply, reduce energy shortages, and support Ethiopia’s renewable energy targets while creating jobs and boosting the economy.

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