* Wind farm is second one in Ethiopia
* Ethiopia diversifying away from hydroelectric power
By Aaron Maasho
ASHEGODA, Ethiopia, Oct 26 (Reuters) - Africa's biggest wind farm began production in Ethiopia on Saturday, aiding efforts to diversify electricity generation from hydropower plants and help the country become a major regional exporter of energy.
The Horn of Africa country - plagued by frequent blackouts - plans to boost generating capacity from 2,000 MW to 10,000 MW within the next three to five years, much of it coming from the 6,000 MW Grand Renaissance Dam under construction on the Nile.
The plan also consists of raising wind power generation to more than 800 MW and geothermal capacity to less than 100 MW.
The 210 million euro ($289.68 million) Ashegoda Wind Farm was built by French firm Vergnet SA with concessional loans from BNP Paribas and the French Development Agency (AFD). The Ethiopian government covered 9 percent of the cost.
"Various studies have proved that there is potential to harness abundant wind energy resources in every region of Ethiopia. We cannot maintain growth without utilising the energy sector," Prime Minister Hailemariam Desalegn said in a speech at the launch.
Experts put Ethiopia's hydropower potential at around 45,000 MW and geothermal at 5,000 MW, while its wind power potential is believed to be Africa's third-largest behind Egypt and Morocco.
WIND AND WATER
Groundbreaking for the Ashegoda Wind Farm was done in 2009 with completion set for 2011 but logistical constraints delayed its finish. It is the second such project in the country after the 51 MW Adama I wind farm, which began production in 2011.
"Ethiopia might have one of the most impressive investment plans in renewable energy in Africa," Vergnet's site manager Roman Coutrot told Reuters.
"It's not only talking, they are acting and signing contracts. The problem they might face is financing but they are not worried about that," he said.
The 120 MW, 84-turbine farm - straddling a sprawling field of grassland dotted by stone-brick hamlets more than 780 kilometres north of Addis Ababa - is part of a plan to mitigate the impact of dry seasons on the country's dams.
At present, Ethiopia's energy resources are almost completely derived from hydropower projects.
"It compliments hydropower, which is seasonal. When you have a dry water season we have higher wind speed," said Mihret Debebe, CEO of the Ethiopian Electric Power Corporation.
"There is harmony between the two sources of energy."
Last week, Ethiopia also signed a preliminary agreement with a U.S.-Icelandic firm for a $4 billion private sector investment intended to tap its vast geothermal power resources and produce 1,000 MW from steam. ($1 = 0.7250 euros)
(Reporting by Aaron Maasho; Editing by George Obulutsa and Catherine Evans)