21 June 2018

Ethiopia: French Development Agency Provides 18 Million Euros for Urban and Geothermal Development in Ethiopia

Photo: Seth G
A geothermal energy source (file photo).

A signing ceremony of two grants Agreements took place at the Ministry of Finance and Economic Cooperation (MoFEC) between Admasu Nebebe, Ethiopian State Minister of Finance and Economic Cooperation, Frederic Bontems, Ambassador of France to Ethiopia and Mr Ignace Monkam-Daverat, the French Agency for Development (AFD) Regional Manager in Addis Abeba, for a total of 18 million euros.

The first agreement, a 10 million euros grant will be provided by AFD in contribution to Urban Development will be part of a program co-financed by the World Bank and the government of Ethiopia. The aim is to strengthen the capacity and performance of local urban governments. It will contribute to expand sustainable urban infrastructure and services, as well as to promote local economic development in cities across Ethiopia.

With the second agreement, 8 million euros grant will be provided in contribution to the Tendaho Geothermal Development Project. It is funded by the European Union, through the European Union Africa Infrastructure Trust Fund (EU-AITF). This investment grant constitutes an additional funding to this project, which already benefited from a 9 million euros concessional loan from AFD and a total of 7,5 million euros from previous EU-AITF grants. The financing will enable to complete the drilling activities planned as part of the geothermal exploration and development effort in the Afar region.

The first program is implemented by the Ministry of Urban Development and Housing (MoUDH). It will build upon the previous Urban Local Government Development Program (ULGDP) by scaling up the support to 73 new Ethiopian cities, for a total of 117. Cities are expected to generate increasing levels of own-revenues in the long term to finance infrastructures and services. The aims of the UIIDP (Urban Institutional and Infrastructure Development Program) is also to assist the creation of well-functioning and productive urban centers, and is aligned with the government's Growth and Transformation Plan II and Ethiopian Cities Sustainable Prosperity Goals.

The second project is implemented by Ethiopian Electric Power (EEP), in coordination with Geological Survey of Ethiopia (GSE). It aims to support Ethiopian economic growth by developing geothermal energy, a source that is reliable and low carbon, and thereby to improve its capacity for climate change adaptation. The activities will focus on developing a shallow reservoir in Tendaho in order to allow a sustainable exploitation with a capacity of an estimated 10MW, and on exploiting a deep reservoir by drilling wells at great depth.

Those two projects fit in with the priorities of AFD in Ethiopia, which are urban development, energy and support to the private sector.

The Agence Française de Développement (AFD) is the French bilateral development bank, which has been working for more than 70 years implementing French development-aid policy. In 2017, AFD committed for 10.4 billion euros financing worldwide.

Source: Embassy of France in Addis Abeba

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