Ethiopia gets $203m World Bank loan

Ethiopia gets $203m World Bank loan

Saturday, June 14, 2014 12:34 pm

Steam rising from the Nesjavellir Geothermal Power Station in Iceland. Source: Wikipedia

Steam rising from the Nesjavellir Geothermal Power Station in Iceland. Source: Wikipedia

By Shu’aibu Adamu (NAN)

Addis Ababa – The Ethiopian Government said it had secured 203 million dollars loan from the World Bank to explore the potential of geothermal energy and boost its plan to become a regional power hub.

Ethiopia, which currently generates 2,300 mega watts of electricity, is pursuing a five year Growth and Transformation Plan (GTP).

Ethiopia’s Minister of State for Finance and Economic Development, Ahmed Shide and World Bank Country Representative Guang Chen signed the agreement in Addis Ababa on Saturday.

The minister said the government was also proposing 25 per cent annual growth in the energy sector.

Officials of the ministry told NAN that 178.5 million dollars of the amount was provided as loan, while 24.5 million dollars as grant.

Speaking while signing the agreement, Shide said the funds would be utilised in financing two geothermal sites of Aluto Langano and Alalobad in the Northern region of the country.

He said that part of the funds would be utilised to establish the country’s institutional framework for geothermal development.

“The domestic demand for electricity in Ethiopia is expected to grow by more than 25 per cent per year.

“Over the next five years, Ethiopia intends to significantly expand electricity coverage, reaching 75 per cent of towns and villages and connecting four million consumers to the grid,” he said.

Ethiopia had, in October 2013, signed an agreement with an Icelandic firm for four billion dollars private sector investment to tap its geothermal power resources.

The resources would assist the country to realise its dream of becoming a major exporter of energy within the East Africa region.

The Icelandic Reykjavik Geothermal company owned by U.S investors signed the deal with Ethiopia to construct a 1,000 MW geothermal power plant in the country.


Join The Conversation

What do you think?

This site uses Akismet to reduce spam. Learn how your comment data is processed.