AfDB gives $118m for irrigation and electricity projects in Ethiopia

Ethiopian flag

Grants given to two projects, one to boost the economy and the other a new Ethiopia-Djibouti energy connection.

The African Development Bank (AfDB) and the Government of Ethiopia have signed two separate grant agreements for new projects to boost economic development and to strengthen electricity trade between Ethiopia and Djibouti.

$47m is being provided to develop irrigation and water management infrastructure for over 12,000ha of land around agri-industry parks. This will create opportunities for entrepreneurs in agriculture to establish agriculture-related businesses activities.

The irrigation infrastructure will help to protect the water-shed areas around the irrigation schemes; go towards training farmers and youth agri-preneurs on soil and water conservation practices, agricultural production, value addition and marketing; and support SMEs to access credit.

Under the scheme, 3,000 young people will receive both agronomic and business development training and the AfDB will co-finance the work alongside the Arab Bank for Economic Development in Africa (BADEA).
At the same time, $71m has been announced for the Ethiopia-Djibouti Second Power Interconnection Project, which aims to boost electricity trade between Ethiopia and neighbouring Djibouti.

The interconnection project will enable the construction of 300km of interconnector lines, 170km of transmission lines to reinforce the network within Ethiopia, and new construction and expansion of substations in the two countries.

In Djibouti, expected benefits include a 65% increase in customer connections and a sharp reduction in the use of thermal generation plants from 100% to around 16%. In Ethiopia, the project would lead to higher incomes from the power trade which over the last 10 years raised over $275 million in revenue from power exports.

Upon completion, Ethiopia’s revenue from power exports will increase, while at the same time boosting Djibouti’s access to reliable, affordable, and clean electricity and lowering its greenhouse gas emissions.

Dr. Abdul Kamara, deputy director general at the AfDB, said: “By enhancing economic ties through increased cross-border power trade and improved economic competitiveness, the project will contribute towards harnessing regional peace and stability and addressing regional fragility.”