Ethiopia has signed a preliminary agreement with a U.S.-Icelandic company, Reykjavik Geothermal, a US$4 billion geothermal power resources investment agreement, Reuters reported.

Reykjavik Geothermal and the Ethiopian government signed the agreement on Wednesday to construct a 1,000 MW geothermal power plant in Ethiopia's volcanically active Rift Valley region.

When complete, the project will be Ethiopia's biggest foreign direct investment and Africa's largest geothermal power plant.

"This is an epic moment for all of us ... bringing Ethiopia to the forefront of geothermal development," said Reykjavik Geothermal CEO Gudmundur Thoroddsson, during the signing of the agreement with the government owned Ethiopian Electric Power Corporation (EEPCO), in Addis Ababa.

Ethiopia's hydro-power potential estimated at around 45,000 MW and its geothermal potential at 5,000 MW, but Reykjavik says the accessible geothermal resources could reach as much as 15,000 MW, according to Reuters.

Source: Reuters