African Development Bank to Provide $995,000 to Support Ethiopia’s Renewable Sector

Ethiopia is rolling out a sustainable procurement framework for IPPs


Ethiopia’s quest to roll out a sustainable procurement framework for independent power producers has received a boost in the form of a grant of $995,000 made by the Sustainable Energy Fund for Africa (SEFA), managed by the African Development Bank (AfDB).

The SEFA grant is expected to encourage private investments into hydropower projects through Ethiopia’s renewable energy program. It is likely to strengthen the government’s capacity to undertake bankability and technical analysis, including feasibility assessments of projects in the hydro priority pipeline.

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

“A well-structured procurement framework is crucial in mobilizing the investments necessary to achieve universal energy access in Africa. The SEFA program will boost private IPPs participation, and spur investments into the Ethiopian hydropower sector,” said Wale Shonibare, the bank’s acting Vice President for Power, Energy, Climate Change and Green Growth.

The program also complements the assistance provided by the bank’s institutional IPP support project, as well as the bank-financed Mekele-Dallol and Semera-Afdera Power Supply for Industrial Development and Access Scale-up Project,” Shonibare added.

Ethiopia has a vast but untapped renewable energy potential. Under a long-term development strategy, the government has outlined a National Electrification Program (NEP), targeting universal access by 2025 through a 65% on-grid, and 35% off-grid combination. The goal is to transform the country into a regional energy hub by 2030.

The Ethiopia Renewable Energy Program, supported by the SEFA grant, is in line with the country’s Growth and Transformation Plan (GTP II) 2015/16 – 2019/20 and with the NEP targets. It also aligns with the Bank’s Energy Sector Policy (2012), the New Deal on Energy for Africa, especially focusing on renewable energy and early-stage project finance.

Ethiopia, along with a host of other African nations, needs major power sector transformation. Recently, the World Bank committed $22.5 billion to Africa for climate adaptation and mitigation in the next five years.