7 November 2008 – The World Bank signed on Thursday a $US 8 million grant agreement with the Ethiopian Electric Power Corporation (EEPCo) to support increased access to electricity in rural towns and villages with grid access, within the context of the Universal Electricity Access Programme (UEAP) in Ethiopia.
Acting as administrator for the Global Partnership on Output-Based Aid (GPOBA), the World Bank said in a statement that up to 228,571 low-income households will benefit from the scheme through a new or regularized electricity connection and the provision of two energy-efficient Compact Fluorescent Lamps (CFLs). The lamps will reduce their electricity consumption by 55 percent and make their bills more affordable.
GPOBA will provide a subsidy of US$35 for each new eligible rural household. EEPCo will bear all the construction and commercial risks as it will not receive the subsidy until after independent verification of the "outputs" or services.
Carmen Nonay, Senior Infrastructure Specialist and task manager for the project for the World Bank and GPOBA, said, "Among the benefits for rural households, better quality lighting will reduce indoor air pollution from kerosene lamps, help children to study at night, and enable families to increase their income by additional home-based economic activity." EEPCo has been able to almost double the number of electrified towns and customers served in the last five years, with the support of international donors including the International Development Association (IDA), the concessional lending arm of the World Bank. However, even in areas with grid access, many families are unable to have a metered connection installed because they cannot afford the high one-time connection fee, according to World Bank.