WASHINGTON, May 29, 2012 – The Board of Executive Directors of the World Bank today approved a US$200 million credit from the International Development Association (IDA*) to the Government of Ethiopia (GoE) to increase rural coverage and to provide access to affordable, modern, cost-effective electricity services to its citizens.
Over the past 5 years, GoE has made some commendable strides in improving access to electricity. As a result, over 41% of rural towns and villages have been connected to the grid and an additional 2 million consumers have access to electricity. However, per-capita consumption of electricity in Ethiopia remains relatively low at about 200 kWh per year.
The Electricity Network Reinforcement and Expansion Project (ENREP) aims to support GoEs’ efforts of reinforcing the country’s electricity network by upgrading and extending the grid in order to improve the overall service delivery of the Ethiopian electricity network. In addition, the project will help to increase access by intensifying connections to existing households and villages in the areas already connected by the grid while at the same time, enhancing connectivity in new areas.
The project will also help to develop markets for renewable energy and energy efficient products such as, stand-alone solar home systems, solar lanterns, improved cook-stoves, biogas, compact fluorescent lamps, etc.
“The project will provide desperately needed power to not only those who are already connected to the grid, it will also provide modern energy services for poor households in the proximity to the grid who cannot afford a grid connection. This means that for the first time, children in those areas will be able to do their homework and read at homes lit by light bulbs” said, Guang Z. Chen Country Director for Ethiopia
The project will provide a comprehensive technical assistance and capacity building for Ethiopian Electric and Power Corporation (EEPCO), the Development Bank of Ethiopia (DBE) as well as the Ministry of Water and Energy (MoWE). EEPCO will reinforce its transmission and distribution network infrastructure and DBE will widen its market presence extending access to finance to private sector enterprises and micro finance institutions while MoWE will assist with off-grid market development activities.
“The private sector in Ethiopia will get financial support through this project to import, supply and distribute renewable energy and energy efficient products in rural Ethiopia. This project will help create a demand driven vibrant market and shall promote solar home systems, solar lanterns, biogas plants, etc. in addition to conventional grid network development The project targets to benefit about 385,000 Ethiopians.” said Raihan Elahi, Task team leader for the project.
* The World Bank’s International Development Association (IDA), established in 1960, helps the world’s poorest countries by providing loans (called “credits”) and grants for projects and programs that boost economic growth, reduce poverty, and improve poor people’s lives. IDA is one of the largest sources of assistance for the world’s 81 poorest countries, 39 of which are in Africa. Resources from IDA bring positive change for 2.5 billion people living on less than $2 a day. Since its inception, IDA has supported activities in 108 countries. Annual commitments have increased steadily and averaged about $15 billion over the last three years, with about 50 percent of commitments going to Africa.