20 May 2013 – The decision by the African Development Bank (AfDB) to provide US$338 million of funding for a 1,068 km high capacity transmission line between Ethiopia and Kenya has ensured its go-ahead in September 2013. The US$1.26 billion project, due for completion in 2018, will be a major boost to east African regional trade in electricity.
The 2,000 MW Kenya-Ethiopia link will provide Ethiopia with additional foreign earnings, the country having large hydroelectric potential but insufficient local demand, and supply electricity hungry Kenya.
The World Bank is providing US$684 million towards the project, the government of Kenya is providing US$88 million and the government of Ethiopia US$32 million. A further US$118 million is expected from the French Development Agency.
The project will also involve setting up AC/DC converter stations at the Wolayta-Sodo substation in Ethiopia and the Suswa substation in Kenya. Kenya Electricity Transmission Company (Ketraco) and Ethiopian Electric Power Corporation (EEPCO) will be the implementing agencies for the transmission line.
Some 437 km of the link will cover territory in Ethiopia and about 631 km in Kenya.
AfDB’s regional director for the East Africa Resource Centre (EARC), Gabriel Negatu, says, "The direct beneficiaries of the project are households, businesses, and industries in communities located in Kenya, the direct off-taker of the power. The interconnection with Ethiopia will ensure access to reliable and affordable energy to around 870,000 households by 2018."
The AfDB’s financing will be used for the financing of the total cost of the transmission line subcomponent and part of the cost of the converter station subcomponent in Ethiopia; part of the cost of the transmission line subcomponent in Kenya; the total cost of the consultancy services for supervision and management for both Ethiopia and Kenya, as well as part of the cost of capacity building component in Ethiopia and in Kenya.
The World Bank’s financing will be used for the financing of the total cost of the subcomponent converter stations in Kenya and total cost of transmission system reinforcement in Kenya and the major part converter stations in Ethiopia as well as part of the cost of the capacity building component in Ethiopia and in Kenya.
Financing from French Development Agency is expected to cover part of the transmission line subcomponent for Kenya