Dubai-headquartered renewable energy company, AMEA Power, has signed a 25-year Power Purchase Agreement (PPA) with the Government of Djibouti, paving the way for the development of the country’s first solar independent power project at 25 megawatts (MW).
The signing ceremony was held in Djibouti on the 27th August 2023. The PPA was signed by Mr. Djama Ali Guelleh, CEO of the national utility company, Electricité de Djibouti (EDD), and Mr. Hussain Al Nowais, Chairman of AMEA Power. The signing was witnessed by the Minister of Energy and Natural Resources, H.E. Yonis Ali Guedi.
AMEA Power revealed that the project, set to be located in the Grand Bara area south of Djibouti City, is being developed under a Build-Own-Operate and Transfer (BOOT) model. The solar PV facility will be coupled with a Battery Energy Storage System (BESS).
“AMEA Power is proud to reach this milestone and to be supporting Djibouti in its energy transition journey. East Africa is an important market for AMEA Power, as it is a region with immense potential for the development of clean, reliable, and affordable energy,” said Hussain Al Nowais, Chairman of AMEA Power.
Increasing energy access in Djibouti
Once completed, the solar plant is expected to generate approximately 55 GWh of clean energy per year, enough to reach more than 66,500 people. The Sovereign Fund of Djibouti (FSD) will be joining the project before financial close as a minority shareholder. The offtaker for the project will be Electricité de Djibouti.
The Government of Djibouti, as part of its commitments to the global decarbonisation agenda, is targeting to reduce CO2 emissions by around 40% by 2030. The solar project forms part of the government’s plans to reduce emissions from the electricity sector.
Furthermore, the solar project is expected to create jobs and stimulate economic development in Djibouti and help increase the country’s electrification rate, as well as diversify its energy mix.
Estimates from the World Bank show that 65.44% of Djibouti’s population had access to electricity in 2021. The East African country aims to reach 100% electrification rate by 2030 in alignment with the UN SDG7 target to reach universal energy access by the same year.
AMEA Power’s solar project investment in Djibouti represents a positive step for the East African country’s renewable energy sector and will help boost investor confidence.