Dubbed the Red Sea Drilling Company, the new venture will not only work on to develop the country’s geothermal power reserves, but has a plan for training and capacity building that should see it produce a number of engineers and technicians in the coming years, essential for the country’s energy independence.

 

According to a company’s presentation in which Africa’s Oil & Power had access to, Red Sea Drilling Company additionally plans to build capacity in water drilling in a bid to reinforce the country’s water security, and, further down the line, acquire mining and oil and gas drilling capabilities. In the mid-term, the Red Sea Drilling Company plans to become an East African drilling major tapping into Ethiopian, Somalian and Kenyan markets.

 

For now, however, foreign know how is still essential for the country’s short-term goals, which is certainly behind the USD 6.5 million contract awarded in February 2021 by ODDEG to Kenya’s KenGen to drill 3 wells in Lake Assal. In time, the Red Sea Drilling Company will be at the center of Djibouti’s ambitious geothermal dreams of using geothermal energy to fully supply its domestic market and become a de facto power exporter. Estimates indicate that Djibouti holds as much as 1000 MW of generating potential from its geothermal sources which is enough to fulfil the domestic demand with added surplus, to provide electricity to the 50 per cent of Djiboutians that still lack access to the national network, and to supply its growing power hungry industrial park.

 

Early investments in geothermal power in the country go as far back as the 1970s, but conflict and global economic crisis have consistently side-tracked plans. However, in the year 2013, the government negotiated with the African Development Bank to approve a USD 6.83 loan for geothermal exploration around Lake Assal, the most promising area in the country.

 

Another USD 14.68 million loan in the year 2016 and the final approval of a USD 3.22 million loan reached in May 2020 have laid the solid ground for the future establishment of the 20 MW geothermal power plant, with potential is to expand to 50 MW at a later stage. This plant alone could respond to 2/3 of the country’s present energy needs, and will go a long way to fulfil Djibouti’s goal of powering 100% of its economy on renewable energy alone by the year 2030.

 

The small nation state of 8,00,000 people is currently vastly dependent on electricity imports from neighbouring country Ethiopia and on a relatively small heavy fuel based power generation network. This arrangement has meant that Djibouti’s electricity is some of the most expensive in the region, up to 6 times of the price of power in neighbouring country Ethiopia. Geothermal power presents the opportunity for the significant reduction in electricity costs, as well an increase in economic prosperity.