AfDB approves $ 104 million in funding to improve power supply in eastern Ethiopia

Addis Ababa, September 14, 2023 (FBC) – The Board of Directors of the African Development Bank (AfDB) Group today approved $104 million in financing to the Ethiopian government for the financing of a transmission project to improve power supply in the eastern part of the country.

The financing includes a $52 million grant from the African Development Fund, the Bank Group’s concessional lending arm and a $52 million soft loan drawn from Korea’s Economic Development Cooperation Fund under the Korea – Africa Energy Investment Framework Agreement.

The agreement was signed in June 2021 between the African Development Bank and the Government of the Republic of Korea with the main objective of contributing to sustainable economic and social development and promoting economic cooperation in African member countries.

Batchi Baldeh, the Director of Power Systems Development of the Bank, said the project would improve access to clean, reliable electricity supply by increasing the capacity of the power grid in eastern Ethiopia. He emphasized that “Improving the power grid in the east of the country will address brownouts and load shedding in the region, connect more industries and households to the electricity network, and eliminate the use of diesel generators, which currently provide a basic electricity supply”.

Above all, the project will facilitate the launch of the government’s regional agricultural irrigation programme targeting 462,174 hectares currently under design, which is key to tackling the region’s food-security challenge as well as providing adequate fodder for livestock.

The project will involve the construction of 157 kilometres of 400-kilovolt double-circuit transmission lines and associated substations at Harar, Jijiga and Fafem, according to AfDB.

These will boost the power transfer capacity in the eastern part of Ethiopia. The project will serve as a take-off point for future power interconnection to the Federal Republic of Somalia and contribute to the Horn of Africa Regional Initiative helping to address the drivers of fragility and conflict and facilitate regional economic integration and trade.

The project promises substantial benefits for commercial and industrial operators.

“Moreover, it encompasses a significant educational component, offering opportunities to 200 students—with a commitment to including at least 40% girls—for six-month placements during the construction phase, thus facilitating hands-on learning and experience. Further deepening its investment in education, the initiative will provide 30 students, including a minimum of 50% girls in the region with grants to attend training courses in the energy sector,” AfDB stated.