Since 2010, AFD has been accompanying the public electricity utility, Ethiopian Electric Power (EEP), in reinforcing the domestic power grid. A €50m loan was allocated in 2011 for the construction of 4 substations and the installation of transmission lines around Addis Ababa.
Context
The public utility Ethiopian Electric Power (EEP) is in tune with the increase in economic growth and has been implementing a major investment program since the early 2000. The generation capacity has thus grown in a few years from 814 MW in 2005 to around 4.2 GW in 2016.
The increase in the power generation capacity has however not been followed by a similar level of investment in the transmission grids and transformer substations.
Consequently, several dams are unable to operate at their full capacity because all the electricity produced cannot be transported to the consumers.
This poor service quality leads to a double cost for the economy:
- the need for industries and services to acquire diesel generators;
- a general dissatisfaction of the users, which blocks the acceptability of a tariff reform, although it is necessary for the stability of the sector.
To remedy these shortcomings, massive investments are currently being implemented in all the architecture of the high-voltage transmission network.
In this context, EEP has requested AFD financing to reinforce the transmission grid which supplies the industrial zones in the south and west of Addis Ababa.
Description
The aim of the program is to improve economic production and the well-being of the population by supplyingand competitive energy.
This program has three subobjectives:
- Develop industries by providing electricity to the industrial zones south of Addis Ababa.
- Connect new villages to the domestic grid and improve the services to connected users.
- Reinforce EEP’s planning and management capacity for the high-voltage transmission subsector.
The program has two components:
- An investment component for the reinforcement of the high voltage grid. This component comprises the construction of 230 and 400 kV lines, as well as 4 sub-stations.
- A management support and capacity building component to support EEP in the project implementation, supervise the works contracts and build capacities, mainly for EEP’s planning and construction teams.
Impacts
This project aims to meet urgent needs for access to electricity by connecting new villages to the domestic grid and improving the service for connected users.
Several villages are to be connected as part of the national electrification program, in particular in the Ginchi area where the distribution station is currently
overloaded and cannot meet demand. In Debre Zeit, more than 25,000 users are already connected and demand is increasing by 3,000 new connections a year. The project will thus have a short-term social impact by connecting new households to the domestic grid.
This financing also supports the country’s economic development by improving the transmission and distribution capacity in an important industrial zone located on the road to Djibouti, Ethiopia’s main communication link.
09/12/2013
Project start date
Sectors
Debre Zeit
Financing tool
50 000 000
EUR
Ethiopian Electric Power
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