World Bank announces a $1.4 billion program to ramp up Ethiopia’s energy sector

Addis Ababa, April 4, 2024 (FBC) — The World Bank has announced a financing envelope of up to US$1.4 billion for Power Sector Reform, Investment and Modernization in Ethiopia program (PRIME) which will be implemented over several phases in the next 10 years.

In an official press release, the World Bank emphasized that the PRIME program aims to strengthen and expand Ethiopia’s electricity network, improve sector financial viability, and promote renewable energy generation through private sector involvement. The initiative is expected to benefit the entire population of Ethiopia over its lifetime, addressing critical infrastructure needs and facilitating new connections.

Acknowledging Ethiopia’s progress in electrification efforts over the past decade, the World Bank highlighted the government’s achievements in expanding grid network coverage to nearly 60% of towns and villages. However, challenges persist, with an electricity deficit impacting socio-economic needs and limiting access to opportunities for many individuals.

Wendy Hughes, World Bank Regional Director for Infrastructure for Eastern and Southern Africa, stressed the importance of a medium-term approach to address structural and operational challenges in transforming Ethiopia’s electricity sector.

She underscored that the partnership between the World Bank and Ethiopia over the next decade aims to attract private capital and other development partners to support the country’s electrification goals.

On his part, Ousmane Dione, World Bank Country Director for Ethiopia, Eritrea, South Sudan, and Sudan, underscored the significance of PRIME in modernizing and strengthening Ethiopia’s power sector. The program is poised to significantly enhance the quality of electricity service, increase renewable energy generation, and mobilize private investments to sustain the nation’s rapid pace of electrification.

Moreover, PRIME is expected to enhance Ethiopia’s resilience to climate change by diversifying its power generation mix and harnessing its abundant clean energy resources like solar, wind, and geothermal.

The implementation of the PRIME project will be overseen by Ethiopian Electric Utility and Ethiopia Electric Power, both fully government-owned public enterprises committed to driving sustainable energy development in the country.