AfDB Group Sanctions $8mln to Fund Ethiopia’s Mini-Grid Plan

ADDIS ABABA – The African Development Bank (AfDB) Group says its Board of Directors has approved $8 million to support the rollout of a pioneering pilot mini-grid program in Ethiopia with potential Africa-wide benefits.

The funding is provided by the Bank-managed Sustainable Energy Fund for Africa (SEFA) in the form of concessional loans, grants and risk mitigation.

It will finance up to 50% of mini-grid capital expenditures for the Ethiopia Distributed Renewable Energy and Agriculture Modalities program (DREAM).

AfDB says DREAM, which represents a first-of-a-kind approach for Africa’s mini-grid industry, entails a pilot that will test the commercial viability and effectiveness of a business model integrating mini-grids with agribusiness operations at 9 sites across Ethiopia.

“The DREAM project provides an innovative approach to addressing the water-energy-food nexus in Ethiopia,” said Dr Daniel Schroth, the Bank Group’s Director for Renewable Energy and Energy Efficiency.

“It demonstrates the importance of partnerships and the catalytic role played by the Sustainable Energy Fund for Africa (SEFA) in crowding-in private sector investments in energy access,” the Director added.

The program was developed in collaboration with the Global Energy Alliance for People and Planet (GEAPP), which is providing co-financing, and the Ethiopia’s Ministry of Water and Energy, Ministry of Irrigation and Lowlands, Ministry of Agriculture and other stakeholders.

The pilot’s successful conclusion will pave the way for potential scale-up and replication of the model in Ethiopia and other African countries .

“Water, energy, and food are critical for our sustainable well-being,” said Dr Eng. Habtamu Itefa, Ethiopia’s Water and Energy Minister.

“The Ethiopian government is approaching the twin challenges of agricultural productivity and energy access with an integrated approach. We are glad to partner with the African Development Bank, through SEFA, and other project stakeholders on this innovative DREAM pilot, the Minister stated.

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