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The Nairobian

AfDB okays Sh30b for Ethiopia – Kenya power line

Business

By John Oyuke | Sep 21, 2012

By John Oyuke
African Development Bank (AfDB) has approved Sh30 billion ($348 million) for Ethiopia and Kenya to finance a cross-border power line, the first phase of a $1.3 billion project to develop a regional power grid in East Africa.

The financing approved by the Board of the African Development Fund, the concessional window of the regional multilateral development bank, will fund construction of transmission line and related infrastructure between the two countries.

The electricity highway project involves the construction of a 1,068km high-voltage direct current 500kv transmission line between the two countries.

It also includes putting up of associated converter stations at Wolayta-Sodo (Ethiopia) and Suswa (Kenya), with a power transfer capacity of up to 2,000mw.

Feasibility studies
The project is intended to promote power trade and regional integration, contribute to the Eastern Africa Power Pool (EAPP) countries’ social and economic development, and reduce poverty in those countries.

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“Our involvement in the project has included a leading role in the preparation of the project and financing some of the feasibility studies required to appraise the project and make it bankable,” said Gabriel Negatu, AfDB’s regional director in charge of East Africa.

Negatu said the bank group had mobilised funds from other development partners in a timely and efficient manner.

“The project is also perfectly aligned with the climate change mitigation and adaptation strategy of the Bank, as it has the potential to replace some fossil-fuelled thermal generation in the East African region,” he said.

The project has been co-financed with World Bank, the French Development Agency (AFD) and two Governments of Kenya and Ethiopia.

The key inter-country power link comes at a time when demand for electricity in the East African region has risen relative to supply, leading to severe power shortages and use of expensive power from emergency generators.

AfDB’s Senior Power Engineer, Thierno Bah noted that East African region is blessed with abundant energy resources which have remained untapped for some time, in particular hydropower and geothermal.

He said with the flagship project as an anchor link in establishing the backbone of East African Power Pool (EAPP), energy resources can be pooled to create a regional electricity market through power trading.

Negatu said integration of power systems of the EAPP will enable the development of Ethiopia’s large hydropower resources for the export market and address power shortages throughout the region.