News Article

World Bank Releases $ 130 Million Loan, Grant to Energy Access Project in Ethiopia

Reprinted from the Addis Tribune

In line with a loan agreement signed between the World Bank (WB) and the Federal Democratic Republic of Ethiopia last year for the implementation of Energy Access Project, the former has released close to 130 million USD loan and grant as of April 11 last week.

As part of the project, on the other hand, the Ethiopian Electric Power Corporation (EEPCO) had conducted a three-day Tariff Study Project workshop aimed at revising the existing tariff.

Aklilu W. Mariam, head, Information and Public Relations Service at the Ethiopian Electric Agency, and Energy Access Project Coordinator, told Addis Tribune that the project was planning to electrify more than 100 rural towns within the coming five years and which was expected to be completed in June 30, 2007.

According to the agreement, the project is aimed at establishing a sustainable program for the expansion of access to electricity and for the improvement of the quality of the electricity supply in the country, reducing environmental degradation and improving the supply and efficient use of energy, reducing the barriers to the widespread use of renewable energy technologies and providing technical support to the country for the institutional and capacity building of the energy sector agencies and for regulatory, fiscal and institutional reforms in the mining sector to attract private investment.

Aklilu said that the project was consisting of various parts involving different Ministry offices, such as the Ministry of Infrastructure, the Ministry of Mines and the Ministry of Agriculture as well as the Ethiopian Electricity Agency and EEPCO, to carry out the various parts of the project.

Carrying out a study by the Ministry of Infrastructure to determine the country’s long-term strategy for the development of its power sector, rehabilitation and expansion of EEPCO’s urban electricity distribution system, expansion by EEPCO of the country’s grid based rural electrification program to approximately 164 towns in the Amhara, Oromia, Somali and South Nation Nationalities and People regions were major parts of the project, according to Aklilu.

He added that the project also include other things such as the development of national strategic plan and policy framework for the country’s biomass energy sector, and carrying out of capacity building activities for the staff of the environmental and social management monitoring unit in the EEPCO.

EEPCO takes the largest share of the project and is expected to revise its organizational structure. Accordingly, it conducted a three-day tariff revision workshop this week at the Hilton Hotel. EEPCO has implemented the existing tariff since April 1998. Nevertheless, it said that more than 80% of the items required for the electricity service activities were imported from abroad in hard currency.

“The current tariff does not meet the future financial requirements of EEPCO. Moreover, the power sector as well will be short of meeting the basic financial requirements,” EEPCO said in a statement.

It was learnt that Scott Wilson Piesold and Power Planning Associates consultants started the tariff study assignment, which consists of inception phase, interim phase, draft final phase and final phase, since May last year. The inception phase report has already been completed. Experts of the consulting groups have submitted the interim phase report during the three-day workshop this week.

About EATIC
The Ethio-American Trade & Investment Council (EATIC - www.eatic.org) is a non-profit, non-partisan, tax exempt membership organization of corporations and individuals dedicated to strengthening and facilitating trade and investment between Ethiopia and the United States of America. The Council believes that it can best accomplish this goal through education, focusing on broadening the respective knowledge of various social customs, cultural traditions and economic climate of both countries.

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