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Friday, July 23, 2021
The African Development Bank Group and the Government of Ethiopia have signed a grant agreement for electricity trade between Ethiopia and Djibouti. The grant falls under the Bank Group’s concessional lending window, the African Development Fund, and will go towards the $71 million Ethiopia-Djibouti Second Power Interconnection Project, which aims to boost electricity trade between Ethiopia and neighboring Djibouti.
The Ethiopia-Djibouti Second Power Interconnection Project follows an earlier Bank-financed power interconnection project between the two countries, and builds on its accrued benefits over the last 10 years. It will enable the construction of about 300 km of interconnector lines, 170 km of transmission lines to reinforce the network within Ethiopia, and new construction and expansion of substations in the two countries. In Djibouti, expected benefits include a 65% increase in customer connections and a sharp reduction in the use of thermal generation plants from 100% to around 16%. In Ethiopia, the project would lead to higher incomes from the power trade which over the last 10 years stood at over $275 million in revenue from power exports.
Upon completion, Ethiopia’s revenue from power exports will increase, while at the same time boosting Djibouti’s access to reliable, affordable, and clean electricity and lowering its greenhouse gas emissions.
“By enhancing economic ties through increased cross-border power trade and improved economic competitiveness, the project will contribute towards harnessing regional peace and stability and addressing regional fragility,” said Dr. Abdul Kamara, Deputy Director General, East Africa Regional Development and Business Delivery Office of the African Development Bank.
The grant agreement was signed on 21 July 2021 by Ethiopian Finance Minister Ahmed Shide, and Kamara.
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