Reykjavik Geothermal, the Icelandic company that’s helped build power plants in more than 30 countries, agreed to develop as much as 1,000 megawatts of projects in Ethiopia over the next 10 years.

 

The company expects to spend a total of $4 billion and will begin drilling test wells early next year, Chairman Michael Philipp said. About 10 megawatts will be in operation by 2015, with a total of 500 megawatts by 2018. A second phase may include as much as 500 additional megawatts of capacity.

 

Ethiopian Electric Power Corp. has agreed to buy all the electricity under a 25-year contract.

 

The Great Rift Valley in East Africa, which spans eight countries, may have as much as 20 gigawatts of potential geothermal energy, according to data compiled by Bloomberg. The agreement between Reykjavik Geothermal and Ethiopia may be the first of many on the continent, said Mark Taylor, a Bloomberg New Energy Finance analyst.

 

The project planned in Ethiopia’s Corbetti Caldera region will be Africa’s largest geothermal power plant, and is part of President Barack Obama’s $7 billion plan to double electricity access in Ethiopia, Ghana, Kenya, Liberia, Nigeria and Tanzania.

 

“My vision is that over 30 years we will harness the 80,000 megawatts of renewables that we have,” including hydroelectric, wind and solar, Ethiopia’s Prime Minister Hailemariam Desalegn said. “Aid is not a solution. Trade and investment is a solution. Trade and investment have a lasting impact.”