DJIBOUTI Jan 26 (Reuters) - The small African nation of Djibouti will invest $31 million in geothermal power plants to cut reliance on imported electricity from neighbouring Ethiopia, officials said.
The country in the Horn of Africa has a population of less than a million people and peak demand of 70 megawatts of electricity, 65 percent of which comes through a line connecting the Djiboutian grid with that of Ethiopia, said Djama Ali Guelleh, director of electricity.
The project, to be funded by a range of lenders such as the African Development Bank, will start in 2015, with the first phase producing 50 MW and output doubling after the second phase. Four steam wells will be drilled in the first phase.
"This funding will ensure the commercial viability of exploiting this resource and to significantly increase the supply of affordable energy for people and the sectors of our economy," said Ilyass Dawaleh Moussa, the minister of economy and finance.
Development of the Assal geothermal field has been contracted to Reykjavik Energy Invest of Iceland, Djibouti's director of electricity said.
(Reporting by Abdourahim Arteh; Writing by Duncan Miriri; Editing by David Goodman)