Ethiopia is set to receive US $200m from World Bank for its Renewable Energy Guarantees Program (REGREP) aimed at supporting the country’s ongoing power sector reforms and leverage private sector financing for renewable energy generation.
Rahul Kitchlu, Senior Energy Specialist at the World Bank confirmed the reports and said that the program will create a platform for much-needed private sector participation in the crucial energy sector by lowering the risks of investing in Ethiopia.
“REGREP comes at this critical juncture and signals the Government’s commitment to comprehensive power sector reforms and a private sector led renewable energy development program that has the potential to be one of the largest in Sub-Saharan Africa,” said Rahul Kitchlu.
Renewable Energy Guarantees Program (REGREP)
Ethiopia has vast and largely unharnessed clean energy resources. It is one of the few countries in the world which generates almost all the electricity from renewable resources, mostly hydropower, which also makes it vulnerable to climate change.
REGREP is set to support diversification from hydropower and towards modern renewable – in solar and wind power. The program will also support the development of over 1,000 MW of greenfield solar and wind energy Independent Power Producer (IPP) projects in Ethiopia, including the World Bank Group Scaling Solar initiative.
Under the program, solar and wind energy plants with a combined capacity of 1,000MW will be developed throughout Ethiopia. REGREP is fully aligned with the World Bank’s Country Partnership framework for FY18—FY22. It will foster structural transformation for growth by enhancing private sector financing of infrastructure projects; build resilience and inclusiveness by increasing supply of electricity sustainably and help to manage the impact of climate change through diversification of energy sources.
World Bank Group’s support to Ethiopia’s IPP program follows a sequenced approach under which financing and technical assistance for policy reforms have unlocked significant opportunities for private sector participation in the power sector. The Energy Sector Management Assistance Program (ESMAP) provided support in terms of resource mapping and validation, as well as technical studies to identify areas for wind development.