WASHINGTON, May 29, 2014—The World Bank’s Board of Executive Directors today approved a US$178.5 million credit from the International Development Association (IDA*) and a US$24.5 million grant from the Scaling-up Renewable Energy Program (SREP) Trust Fund to help the Government of Ethiopia (GoE) develop its geothermal energy resources to boost electricity supply to all Ethiopians and increasingly become a regional power hub.
The domestic demand for electricity in Ethiopia is expected to grow by more than 25 percent per year. Over the next five years, the GoE intends to significantly expand electricity coverage, reaching 75 percent of towns and villages and connecting four million consumers to the grid.
The Geothermal Sector Development project (GSDP) will help the government to fulfill this increasing demand for electricity by diversifying its power generation sources and tapping into its substantial geothermal energy potentials.
“In addition to providing energy security the project will support Ethiopia’s efforts to build a climate resilient green economy, by developing renewable energy sources with low carbon emissions,” said Guang Zhe Chen, the World Bank Country Director for Ethiopia.
The project which will be implemented in two phases will develop two potential geothermal sites (Aluto and Alalobad) and help establish an institutional framework for geothermal development during its first phase. During its second phase, electricity will be generated using the steam resources developed and identified in the first phase.
The power generated from geothermal plants will provide electricity directly to the grid and allow more households and businesses to connect at affordable rates. It will also provide reliable energy to existing commercial consumers currently affected by the energy rationing resulting from insufficient generation capacity.
“The geothermal project marks a new push to increase access and improve reliability of electricity supply to new and existing customers",” said Raihan Elahi, the World Bank Task Team Leader for the project. “Reliable electricity supply to industries and businesses will support job-led growth.”
In March 2013, the WBG announced a major international effort to expand renewable power generation in developing countries by tapping into the underutilized resource, geothermal energy. The project will continue to support the joint effort of the Climate Investment Fund/Scaling-up Renewable Energy Program (SREP) and the WBG to promote development of geothermal energy across the globe.