HomeNewsGrant approved for Ethiopia-Djibouti Second Power Interconnection Project

Grant approved for Ethiopia-Djibouti Second Power Interconnection Project

The Board of Directors of the African Development Bank Group or Banque Africaine de Développement has approved two grants worth US$ 83.6m for the implementation of the Ethiopia–Djibouti Second Power Interconnection Project.

The funds comprise a US$ 69.65M grant to Ethiopia and the second grant of US$ 13.93M to Djibouti, both of which are sourced from the African Development Fund, the AfDB’s concessional financing window that contributes to the promotion of economic and social development in the least developed African countries through the provision of concessional funding for projects and programs, as well as technical assistance for studies and capacity-building activities.

Overview of the project

The Ethiopia–Djibouti Second Power Interconnection project will entail the construction of nearly 300 km of interconnector line, 170 km of transmission lines, and construction of new and renovation of substations in the two countries.

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This project complements the first power interconnection project between the two countries which was inaugurated in October 2011.

According to Mr. Batchi Baldeh, the AfDB’s Director of Power Systems Development, the 283-km transmission line is reaching its power transfer capacity limit due to several developments in both countries, such as the industrial development in the eastern part of Ethiopia, the railway line from Djibouti to Ethiopia, which is powered by electricity, and the port expansion in Djibouti.

“The two countries have therefore decided to develop the second power interconnection line so as to maintain energy security and reliability particularly for the Republic of Djibouti,” he concluded.

Expectations for the project

Upon completion, the project in question is expected to increase Ethiopia’s power export revenue and at the same time boost Djibouti’s access to reliable and affordable clean electricity, lowering costs to below US$ 0.10 per kWh.

The latter will contribute to a more conducive environment for businesses and job creation for youth, as well as lower greenhouse gas emissions, especially in Djibouti.

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