Djibouti-Ethiopia Power Interconnection: Hydro-Powering East Africa

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Omar Guelleh, President of Djibouti, stated “This (project) is to reduce significantly the cost of the energy bill that weighs as much on the competitiveness of our economy as on the living standards of our households.”

The development objective of the project was to improve electricity access in Ethiopia and Djibouti at affordable prices through regional cooperation in power trade.

The AfDB has been an active partner in implementing the connection by providing USD 95 million for the project. The 283-km Ethiopia-Djibouti transmission line was officially inaugurated in October 2011. The 230-kV line, enabling Djibouti to import up to 60 MW of electricity, is estimated to be earning Ethiopia at least USD 1.5 million per month, and has eased Djibouti’s reliance on fossil-fuel power plants and generators.

The project also provided short-term employment for about 1,190 people in Ethiopia and 460 in Djibouti. Also, it generated opportunities for jobs and transfer of skills to sub-contractors in Djibouti and Ethiopia. In Djibouti, import of the low-cost hydropower would help to suppress the costly thermal generation resulting in cost savings through reduced oil import. The interconnection also enables the two systems to support each other during emergencies.

ADF Financing, Project Preparation, Advisory and Brokering Role

ADF 11 has invested a loan of USD 42.89 million for Ethiopia and loan/grant of USD 54.79 million to co-finance the project with the Ethiopian Electric Power Corporation (EEPCo) and the Ministry of Economy, Finance and Planning Electricité de Djibouti (EdD).