Grant approved to support private investment in Ethiopia’s hydro sector

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The African Development Bank’s Sustainable Energy Fund for Africa (SEFA) has approved a grant to help spur investments in hydropower in Ethiopia.

SEFA has approved a $995,000 grant to support the roll out of a sustainable procurement framework for Independent Power Producers (IPPs) in the grant, with the goal to encourage private investments into hydropower projects through Ethiopia’s Renewable Energy Programme.

The grant will strengthen the government’s capacity to undertake bankability and technical analysis including feasibility assessments of projects in the hydro priority pipeline. The grant also provides for environmental and social impact assessments, resettlements action plans, and preparation of bidding documents for hydro projects.

“A well-structured procurement framework is crucial in mobilizing the investments necessary to achieve universal energy access in Africa,” commented Wale Shonibare, the Bank’s acting Vice President for Power, Energy, Climate Change and Green Growth. “The SEFA program will boost private IPPs participation, and spur investments into the Ethiopian hydro power sector.

“The program also complements the assistance provided by the Bank’s Institutional IPP/PPP Support Project, as well as the Bank-financed Mekele-Dallol and Semera-Afdera Power Supply for Industrial Development and Access Scale-up Project”, Shonibare added.

Ethiopia has a vast but untapped renewable energy potential. Under a long-term development strategy, the government has outlined a National Electrification Program (NEP), targeting universal access by 2025 through a 65% on-grid, and 35% off grid combination. The goal is to transform the country into a regional energy hub by 2030.

The Ethiopia Renewable Energy Program, supported by the SEFA grant, is in line with the country’s Growth and Transformation Plan (GTP II) 2015/16 – 2019/20 and with the NEP targets. It also aligns with the Bank’s Energy Sector Policy (2012), the New Deal on Energy for Africa, especially focusing on “Renewable Energy” and “Early Stage Project Finance”.

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