An Ethiopia-Kenya hydropower interconnection project may be the first to benefit from work beginning conducted by the African Development Bank (AfDB), through the African Carbon Support Programme (ACSP), to develop a new Clean Development Mechanism (CDM) methodology that would make interstate electricity connection eligible for CDM revenue.

The Ethiopia-Kenya project serves as a case study for the methodology, and involves 2,000 MW of clean hydro energy to be generated in Ethiopia and then exported to Kenya to replace the equivalent amount that would otherwise be generated from fossil fuel-fired power plants. Emissions would be reduced in Kenya, and possible carbon credits would improve the cash flow and the internal rate of return (IRR) of the project.

Upon approval of the methodology by the United Nations Framework Convention on Climate Change (UNFCCC) and registration of the project by the CDM executive board, this project will be the largest CDM project in Africa in terms of greenhouse gases emission reductions and revenue.

The AfDB is dedicated to promoting CDM projects in Africa, as well as regional integration. Currently, interstate electricity connections are ineligible for CDM under existing rules and procedures.