The board of directors of the African Development Bank Group has approved US$104mn 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 US$52mn grant from the African Development Fund, the Bank Group’s concessional lending arm and a US$52mn 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 emphasised 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. 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.