Conducting a wind farm feasibility study in Eastern Ethiopia

The Adigala and Kebri Beyah wind power projects in Eastern Ethiopia are designed to diversify the nation's energy sources and reduce its dependency on hydro resources. To explore the viability of these projects, a comprehensive feasibility study was conducted, focusing on the potential benefits of adopting a Public-Private Partnership model for investment.

The study examined various factors of the PPP model, including technical, environmental, social, economic, financial, contractual, and legal viability. Beside the technical design and energy yield assessment, a key component of the evaluation was the Value for Money analysis, which demonstrated significant savings compared to other sovereign-financed projects over a 20-year period. Detailed legal and economic evaluations further reinforced the project's financial benefits.

Moreover, the economic analysis assessed the broader impact on Ethiopia's economy, highlighting advantages such as increased electricity sales and carbon credits. The study confirmed that the wind power projects are both affordable and attractive to private sector investors, while ensuring adherence to Ethiopian guidelines and legislation.

Additionally, the study outlined a legal, commercial, and contractual PPP transaction approach, providing a clear roadmap for the next steps of implementation. This initiative promises to enhance Ethiopia's energy sustainability and foster economic growth through innovative renewable energy solutions.

Main Activities

• Technical design, including energy yield assessment
• Environmental and social impact assessment
• Evaluation of use of Public-Private Partnership model for power plant investment
• Implementation of Value for Money analysis
• Implementation of economic analysis to asses overall project impact on the Ethiopian economy

Select Results

• Identification of public concerns and obstacles, with mitigation strategies
• Feasibility assessment for informed government decision
• Evaluation of project affordability and economic sustainability
• Demand forecasting for optimal project size and design
• Assessment of key components, technologies, and risks
• Financial and economic feasibility analysis (costs, tariffs, returns)
• Legal and regulatory assessment to identify risks and uncertainties
• Environmental feasibility and required mitigation measures
• Comprehensive risk assessment with allocation and mitigation strategies
• Preliminary contract structure (revenue regime, payment mechanisms)
• Value for Money (VfM) analysis comparing PPP vs. EPC procurement
• Market potential evaluation for private sector interest
• Development of PPP Procurement Strategy (bid model, documentation, evaluation criteria)