Saudi Arabia's Acwa Power has won bids to develop two solar schemes in Ethiopia with a total capacity of 250 megawatts, marking its entry in the African country.

The Riyadh-based utility developer secured two, 125MW projects in the first round of Ethiopia's solar programme, organised under a new public-private partnership law.

State producer Ethiopia Electric Power and Acwa Power signed a letter of intent for the projects on October 15. The parties are set to sign a long-term power purchase agreement by the year end for the plants at a tariff of 2.52 US cents per kilowatt hour over a period of 20 years. The Saudi company was chosen from a list of 12 pre-qualified bidders.

The schemes will plug Ethiopia's power shortfalls as well as help diversify its energy mix. The East African state is currently working to raise power generation capacity to 17,300MW by 2020 from 4,300MW at present.

"Our entrance into Ethiopia is yet another attestation of our impressive track record to win bids at low tariffs, and transform the energy sectors of growing economies," Acwa Power chief investment officer Rajit Nanda said in a statement.

The new plants will be located in Dicheto, in the Afar region, and at Gad in the Somali territory of the country.

The planned solar schemes are expected to power 750,000 homes and offset 320,000 tonnes of carbon dioxide annually.

Acwa Power, in which Saudi Arabia’s sovereign Public Investment Fund has a 25 per cent stake, is one of the kingdom’s leading developers of conventional and renewable power projects.

The company, which is constructing the kingdom’s first utility-scale solar power project, a 300MW scheme in Sakaka, is bidding on $5bn worth of projects for the remainder of the year.