Fund backs green power in Ethiopia

A grant of nearly $1 million has been made to encourage private investment in renewable energy projects in Ethiopia.

The Sustainable Energy Fund for Africa initiative will strengthen the government’s capacity to undertake crucial technical analysis in support of hydro power projects.

Managed by the African Development Bank, it aims to help prize open Ethiopia’s vast – but untapped – renewable energy potential.

“A well-structured procurement framework is crucial in mobilizing the investments necessary to achieve universal energy access in Africa,” said Wale Shonibare, the bank’s acting Vice President for Power, Energy, Climate Change and Green Growth.

“The SEFA program will boost private independent power producers’ participation, and spur investments into the Ethiopian hydro power sector.”

SEFA is a multi-donor facility established to unlock private sector investments in small to medium-sized clean energy projects in Africa through grants, equity investments and support for the public sector.

The fund is backed by contributions from the governments of Denmark, the US and the UK and is hosted and managed by the AfDB.

Its $995,000 grant to Ethiopia will aim to support the roll out of a sustainable procurement framework for IPPs in the country.

In technical terms this will strengthen the government’s capacity to undertake bank ability and technical analysis – including feasibility assessments – of priority hydro power projects.

The grant also provides for environmental and social impact assessments, resettlement plans, and the preparation of bidding documents for hydro projects.

Ethiopia’s government has outlined a National Electrification Programme targeting universal access by 2025 as part of a long-term development strategy, with the ultimate goal of transforming the country into a regional energy hub by 2030.

The Ethiopia Renewable Energy Program, supported by the  SEFA grant, is in line with the AfDB’s New Deal on Energy for Africa whose focus includes renewable energy.