Terra Global Energy Developers, a California-based energy company, has been embroiled in a dispute with the government over the Debre Birhan Wind Project, which was recently added to the list of projects to be developed in a public-private partnership (PPP) arrangement.

Owned by an American of Ethiopian origin, the company signed a memorandum of understanding (MoU) in 2012 with executives at Ethiopian Electric Power (EEP) to develop the farm on an engineering, procurement and construction (EPC) basis. Under this arrangement, a contractor is responsible for work from design to procurement and from construction to the commissioning of the project.

However, last month the board of the Public-Private Partnership Directorate approved the project's development under the PPP scheme. And the project was set to be bid on by private companies who wish to build and operate the farm. In parallel though, Terra Global has gone a long way in developing the project and preparations to realise what would be 200MW of capacity from wind, estimated to cost up to 360 million dollars.

It proceeded to invite independent consultants to conduct the feasibility studies, where nine responded including Factor-4 Energy Project, Energy Workstatt Consultant, Harness Energy, Opus Ventus, Sgurr Energy, Environmental Forward Observer, Addis Geo Tech, Lightener Logistics and Trianon Partners. Terra Global also completed a tender process to procure wind turbine generators from a turnkey construction contractor and secured financing for the construction of the project from a consortium of banks in China. The consultants conducted an 18-month feasibility study and delivered it to Terra Global, which then submitted it along with technical, economic and financial documents to EEP in October 2015.

EEP invited the company for the final contract negotiations in December 2015.

Upon arrival for the negotiations, the company was informed that there had been a change in the government’s policy on the execution of power projects that requires forming a power purchase agreement (PPA) and necessitates a bidding process. The contract was switched to that of an independent power producer (IPP) agreement, in which a private company develops a power plant, generates power and sells it to the government.

This led to further review and deliberation on the pending project. At the beginning of 2016, the energy company reviewed its proposal documents in response to the policy change and re-submitted a revised proposal to EEP to be allowed to continue its work on an independent power producer (IPP) basis. Despite sending consecutive letters, the company received no response from the government, according to Dereje Abebe, CEO of Terra Global Energy Developers, which claims that it spent 4.5 million dollars over the last eight years in preparation for the project.

“We're victims of bureaucracy," Dereje told Fortune. "We've sent letters to former Prime Minister Hailemariam Desalegn and Prime Minister Abiy Ahmed (PhD).”

In the interim, the government approved a new law in 2018 that allows collaborations with the private sector to develop mega-projects, including energy plants. Initially, the board of the PPP Directorate approved 17 projects, including solar, hydropower and road projects. Debre Birhan Wind Project was not on the list.

In April 2019, the senior management of EEP and Terra Global had a discussion on the revised proposal, and EEP forwarded a recommendation letter to its board to exempt Terra Global from a bidding process on the Debre Birhan Wind Project. Lacking a response from EEP, the company sent a letter to the Ministry of Water, Irrigation & Energy detailing the waiver request and asking to commence the construction of the project. Seleshi Bekele (PhD), minister of Water, Irrigation & Energy, wrote a letter last September making it clear that the project should not be included in the PPP, since it was under negotiations before the legislation of the PPP proclamation.

The waiver does not mean it is exclusively given to Terra Global, and the company should conduct face-to-face negotiations with EEP, according to Seleshi, who is also a board member of the PPP Directorate.

“The public's interest is at stake too," Seleshi told Fortune. "Hence, the company should aggressively work on the negotiations and conclude them. The government is to decide if the company isn't holding up its end of the bargain."