The construction of a high voltage electricity line running between Ethiopia and Kenya can now begin after the African Development Bank ( AfDB) agreed to fund the project to the tune of Sh28.4 billion ($338 million).
The electricity line
is expected to provide Kenyan consumers with cheaper electricity from Ethiopiaâ€™s hydro- electricity dams and set the stage for inter-regional trade in electricity. The sale of power to neighbouring countries in East Africa is currently hampered by a lack of transmission infrastructure.
The total cost of the 1,068 kilometre electricity line is projected to cost $1.26 billion. Construction work is expected to begin in September for completion by 2018.
Other financiers for the project are the World Bank ($684 million), the Kenya Government ($88 million) and the Government of Ethiopia ($32 million). A further $118 million is expected from the French Development Agency.
â€œThis project establishes power trade between Ethiopia and Kenya and the wider East Africa region. It not only improves electricity access at affordable prices and enhances cross-border trade, but also provides an important opportunity to generate revenue for countries having excess power generation capacity, as is the case for Ethiopia,â€ said Gabriel Negatu, AfDBâ€™s regional director for the East Africa Resource Centre.
â€œThe direct beneficiaries of the project are households, businesses and industries in Kenya. The interconnection with Ethiopia will ensure access to reliable and affordable energy to around 870,000 households by 2018.â€
The project will also involve setting up AC/DC converter stations at Wolayta-Sodo ( Ethiopia) and Suswa (Kenya) sub-stations, with a transfer capacity of up to 2,000 MW in either direction.
The Kenya Electricity Transmission Company ( Ketraco) and Ethiopian Electric Power Corporation (EEPCO) will be the implementing agencies for the transmission line.
Ethiopiaâ€™s hydro- electricity sources have a capacity of 45,000MW, but the country only utilises 400MW.