The African Development Bank today launched the 1,068-kilometre high-voltage electricity highway to be built between Kenya and Ethiopia.

The project, which is expected to be completed in less than five years, involves the construction of transmission lines of about 437 km in Ethiopia and about 631 km in Kenya and associated AC/DC converter stations at Wolayta-Sodo (Ethiopia) and Suswa (Kenya) substations with a transfer capacity of up to 2,000 MW in either direction.

Speaking at the launch, organized to brief on the project's technical resources, African Development Bank's Regional Director for East Africa Resource Centre (EARC), Gabriel Negatu, reiterated the importance of the project to the East Africa's cross-border trading.

"The African Development Bank recognizes of each of the country specific economic blueprints as well as the region's economic priorities. This 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 revenues for countries having excess power generation capacity, as is the case for Ethiopia," said Negatu.

He added: "The direct beneficiaries of the project are households, businesses, and industries in communities located in Kenya, the direct off-taker of the power. The interconnection with Ethiopia will ensure access to reliable and affordable energy to around 870,000 households by 2018."

AfDB played a leading role in the preparation of the project by financing some of the feasibility studies required to making the project bankable.

The African Development Bank, the World Bank, the Governments of Ethiopia and Kenya will finance the project. In addition the French Development Agency expressed interest to finance the project.

The financing for the project breaks down as follows: African Development Bank, US $338 million; World Bank US $684 million; Government of Ethiopia, US $32 million; Government of Kenya, US $88 million; and the expected financing from the French Development Agency, US $118 million.

The African Development Bank's financing will be used for the financing of the total cost of the transmission line subcomponent and part of the cost of the converter station subcomponent in Ethiopia; part of the cost of the transmission line subcomponent in Kenya; the total cost of the consultancy services for supervision and management for both Ethiopia and Kenya, as well as part of the cost of capacity building component in Ethiopia and in Kenya.

The World Bank's financing will be used for the financing of the total cost of the subcomponent converter stations in Kenya and total cost of transmission system reinforcement in Kenya and the major part converter stations in Ethiopia as well as part of the cost of the capacity building component in Ethiopia and in Kenya.

Financing from French Development Agency is expected to cover part of the transmission line subcomponent for Kenya.