Ethiopia: AfDB Approves $71 Million Loan To Finance Ethiopia- Djibouti Electricity Interconnection Project

The African Development Bank (AfDB) has approved a $71 million loan to Ethiopia for the electricity interconnection project between Ethiopia and Djibouti.

The $71 million facility, which is being provided through the African Development Fund (ADF), will be used for the construction of new infrastructure to facilitate electricity exchanges between Ethiopia and Djibouti.

Co-financed by the World Bank, the project involves the construction of new infrastructure, including a 190-km double-circuit 230kV transmission line linking Galafi and Nagad. Each circuit will have a rated power of 200MVA.

Galafi is on the Djibouti side of the border with Ethiopia. The capacity of the Nagad (Ethiopia) substation will be increased to transfer electricity from Ethiopia’s national grid to Djibouti’s grid.

The stakes are high for both East African countries.

“Domestic electricity generation in Djibouti is currently dominated by fossil fuels (123 MW according to Power Africa).

“As a result, the country’s electricity production is highly dependent on international oil prices,’’ a report by African Energy Portal said.

This situation, the report said, has had a negative impact on the cost of electricity supply and on the country’s balance of payments.

The high price of electricity is considered one of the main factors limiting Djibouti’s economic growth, according to the World Bank.

The inter-connection with Ethiopia would enable Djibouti to benefit from low-cost electricity generated from renewable sources.

Ethiopia is implementing major infrastructure projects to boost its installed capacity in the coming years.

This is the case with the Grand Ethiopian Renaissance Dam (GERD), which will have a large power plant capable of delivering 6,450MW of power.

With this installation, which will deliver its first MW in 2022, Ethiopia is well placed to boost the electricity networks of the countries of the Horn of Africa, and beyond.

Source: https://energynewsafrica.com