The board of directors of the African Development Bank Group has approved US$8mn to support the launch of a groundbreaking pilot mini-grid program with potential benefits across Africa
This funding, managed by the Sustainable Energy Fund for Africa (SEFA), will be provided through concessional loans, grants, and risk mitigation measures to cover up to 50 percent of the mini-grid capital expenditures for the Ethiopia Distributed Renewable Energy and Agriculture Modalities (DREAM) program.
DREAM represents an innovative approach for Africa’s mini-grid sector. The pilot will assess the commercial viability and effectiveness of a business model that integrates mini-grids with agribusiness operations at nine sites across Ethiopia.
The program was developed in partnership with the Global Energy Alliance for People and Planet (GEAPP), which is offering co-financing, alongside Ethiopia’s Ministry of Water and Energy, Ministry of Irrigation and Lowlands, Ministry of Agriculture, Agricultural Transformation Institute, and other stakeholders.
A successful pilot will lay the groundwork for scaling and replicating the model in Ethiopia and other African countries.
“Water, energy, and food are critical for our sustainable well-being,” said Dr Eng. Habtamu Itefa Geleta, Ethiopia’s Minister of Water and Energy. “The Ethiopian government is approaching the twin challenges of agricultural productivity and energy access with an integrated approach. We are glad to partner with the African Development Bank, through SEFA, and other project stakeholders on this innovative DREAM pilot. With the long-standing partnership we have with the Bank, my ministry reaffirms its commitment to work with all stakeholders and ensure the DREAM becomes a reality.”
GEAPP’s Interim CEO, Joseph Ng’ang’a, said, “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. Leveraging on strategic partnerships to implement the programme, DREAM communities won’t just get electrification, but will also get reliable power for irrigation and clean drinking water. The programme will also enable the local economy to create enormous value and accelerate rural development for close to 300,000 people.”
