Africa Development Bank to Extend $8 Million to Ethiopia’s Minigrid Pilot Programme

The Board of Directors of the African Development Bank Group has approved $8 million to help launch a ground-breaking pilot mini-grid scheme that might benefit all of Africa. The money came from the Sustainable Energy Fund for Africa (SEFA), which is overseen by the Bank.

Up to 50% of the mini-grid capital costs for the Ethiopia Distributed Renewable Energy and Agriculture Modalities (DREAM) initiative would be financed by grants, concessional loans, and risk mitigation.

DREAM is a novel approach to the mini-grid industry in Africa. It consists of a pilot project that will evaluate the feasibility and efficacy of a business model that combines mini-grids and agriculture operations at nine different locations around Ethiopia.

The program was created in partnership with Ethiopia’s Ministries of Water and Energy, Irrigation and Lowlands, Agriculture, and Agricultural Transformation Institute, as well as other stakeholders and the Global Energy Alliance for People and Planet, which is providing co-financing.

According to Ethiopia’s Minister of Water and Energy, Dr. Eng. Habtamu Itefa Geleta, “food, energy, and water are critical for our sustainable well-being.” “The Ethiopian government is taking a comprehensive strategy to addressing the two main issues of electricity access and agricultural output. We are excited to collaborate on this creative DREAM prototype with the African Development Bank, through SEFA, and other project stakeholders. In light of our long-standing relationship with the Bank, my ministry reiterates its dedication to collaborating with all parties involved to make the DREAM a reality.

“GEAPP was created to address two of the defining challenges of our time – ending energy poverty and tackling the climate crisis through a just transition to renewable energy, and DREAM is a great example,” stated Joseph Ng’ang’a, interim CEO of GEAPP. By utilizing strategic partnerships to carry out the initiative, DREAM communities will receive clean drinking water and reliable power for irrigation in addition to electrification. Additionally, the program will speed up rural development for nearly 300,000 people and allow the local economy to create huge value.

The Director of Renewable Energy and Energy Efficiency for the Bank Group, Dr. Daniel Schroth, stated: “The DREAM project offers an innovative approach to addressing the water-energy-food nexus in Ethiopia.” It highlights the value of collaborations and the Sustainable Energy Fund for Africa’s (SEFA) pivotal role in drawing in private sector investments in energy access.