Ethiopia has secured a major $420 million financing package from the African Development Bank (AfDB) to significantly accelerate the country’s geothermal energy expansion. Announced on December 7, 2025, the substantial funding will support the development of three large-scale geothermal fields situated in the tectonically active Rift Valley: Aluto-Langano, Corbetti, and Tulu Moye. These three projects are central to Ethiopia’s strategy of shifting its energy reliance.
The investment is a crucial component of Ethiopia’s goal to strategically diversify its energy mix, which is currently heavily dominated by hydropower. The nation’s reliance on hydropower has proven vulnerable due to recurring droughts linked to climate change. The expanded geothermal projects are expected to add over 300 MW of clean, stable base-load electricity to the national grid by 2030, reducing the current strain on the power system and ensuring a more reliable supply for critical sectors.Prime Minister Abiy Ahmed stated that geothermal energy will be key to powering the country’s industrial parks, stabilizing rural electrification efforts, and reducing Ethiopia’s high dependence on expensive, imported diesel power solutions. By harnessing its estimated 10,000 MW of geothermal potential, Ethiopia aims to meet its ambitious target of increasing its total installed power capacity to nearly 20,000 MW by 2030 and secure a reliable backbone for its industrialization agenda.
