African Development Fund extends grant to boost Ethiopia-Djibouti electricity trade

electricityandpoweratrThe Board of Directors of the African Development Bank (AfDB) has approved two grants worth US$83.6mn to boost cross-border trade in electricity between Ethiopia and Djibouti and to deepen integration in the Horn of Africa sub-region

The funds comprise a US$69.65mn grant to Ethiopia and a second grant of US$13.93mn to Djibouti, both sourced from the African Development Fund. The project will entail the construction of nearly 300 km of interconnector line, 170 km of transmission lines, and new construction or renovation of substations in the two countries.

“The first interconnection line is reaching its power transfer capacity limit due to several developments in both countries, such as the industrial development in the eastern part of Ethiopia, the railway line from Djibouti to Ethiopia, and the port expansion in Djibouti. The two countries have decided to develop the second power interconnection line to maintain energy security and reliability for Djibouti,” said Batchi Baldeh, AfDB’s director of power systems development.

This project is expected to increase Ethiopia’s power export revenue while boosting Djibouti’s access to reliable and affordable clean electricity, lowering costs to below US$0.10 per kWh. In addition, it will have a more conducive environment for businesses and job creation for youth as well as lower greenhouse gas emissions

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