The government has hired Siemens Gamesa Renewable Energy, a Danish firm, to install the 29 turbines for the Assela I Wind Project for 143 million euros.

Officials from Ethiopian Electric Power (EEP) and executives from Siemens signed the agreement in a virtual meeting at the end of last week. Financed by Danida Business Finance, the project has 100MW of power capacity. The loan agreement, amounting to 200 million dollars, was signed between the two countries two years ago. Half of the loan is a grant, while the remainder is a loan.

One of the conditions of the loan agreement is to give the project exclusively to Danish companies, according to Ashebir Balcha, CEO of Ethiopian Electric Power.

In January, EEP announced a restrictive bid and invited only two companies, Vestas Wind Systems and Siemens Gamesa, and the latter won the bid by offering the lower price. Siemens Gamesa, the second-largest wind turbine manufacturer in the world, is a Spanish-based engineering company that mainly manufactures wind turbines and provides onshore and offshore wind energy services.

The wind project has the modality of an engineering, procurement, construction and commissioning contract (EPC), and it requires five years of operations and maintenance services. Based on the agreement, Siemens Gamesa-Denmark will control 60pc of the development of the project, whereas Simens Gamesa-Spain, the parent company, will have a 40pc stake.

EEP also hired a consultant to supervise the project last month after floating a closed bid in April of last year. For the consultancy services, EEP considered two companies based in Denmark: COWI and SWECO. COWI, an international consulting group that works mainly on engineering, environmental science and economics, was then awarded a contract to supervise the project.

“This is a vital project, as it is financed solely by Denmark's government from the start as compared to other EPC projects,” said Ashebir.

The Assela I Wind Project, which is located about 150Km south of the capital on the edge of the Rift Valley near Itaya town in Oromia Regional State, has 29 turbines, each of which has the capacity to generate 3.45MW of energy at a time.