The funding was approved by the Sustainable Energy Fund for Africa (SEFA), under the ADB, earlier this week, the Bank disclosed in a statement issued Tuesday.
“The SEFA grant will encourage private investments into hydropower projects through Ethiopia’s Renewable Energy Program,” an ADB the statement read.
The funding is expected to strengthen the Ethiopian government’s capacity to undertake bankability and technical analysis including feasibility assessments of projects in the hydro priority pipeline.
The grant also provides for environmental and social impact assessments, resettlements action plans, and preparation of bidding documents for hydro projects in Ethiopia.
“A well-structured procurement framework is crucial in mobilizing the investments necessary to achieve universal energy access in Africa,” said Wale Shonibare, the Bank’s acting Vice President for Power, Energy, Climate Change and Green Growth.
“The SEFA program will boost private IPPs participation, and spur investments into the Ethiopian hydro power sector,” Shonibare added.
The program is also said to complement the assistance provided by the ADB’s Institutional IPP/PPP Support Project, as well as the ADB-financed Mekele-Dallol and Semera-Afdera Power Supply for Industrial Development and Access Scale-up Project.
Ethiopia has a vast but untapped renewable energy potential. Under a long-term development strategy, the government has outlined a National Electrification Program (NEP), targeting universal access by 2025 through a 65 percent on-grid, and 35 percent off grid combination.
The goal is to transform the country into a regional energy hub by 2030.
The Ethiopia Renewable Energy Program, supported by the SEFA grant, is in line with the country’s Growth and Transformation Plan (GTP II), due effective from 16 to 20.
It also aligns with the ADB’s Energy Sector Policy (2012), the new deal on Energy for Africa, especially focusing on “Renewable Energy” and “Early Stage Project Finance,” it was indicated.