By Ebi Kesiena
The African Development Bank (AfDB) has approved a financing package of up to $110 million to support the development of the 300-megawatt (MW) Aysha Wind Farm Project in Ethiopia, in a move aimed at expanding the country’s renewable energy capacity and strengthening electricity access.
According to a statement issued by the bank over the weekend, the financing package comprises up to $80 million from the AfDB window, $20 million from the Clean Technology Fund, and $10 million from the Sustainable Energy Fund for Africa (SEFA).
The $508 million project will be developed, owned and operated by UAE-based AMEA Power, which will oversee the design, construction, operation and maintenance of the wind farm located near Aysha in eastern Ethiopia.
The project also includes the construction of a five-kilometre transmission line and upgrades to the existing Aysha II substation to facilitate power evacuation.
Under a 25-year Power Purchase Agreement (PPA), state-owned Ethiopian Electric Power (EEP) will serve as the sole off-taker of electricity generated by the facility and will assume ownership of the completed transmission line.
Once operational, the wind farm is expected to generate about 1,189 gigawatt-hours (GWh) of clean electricity annually, significantly boosting Ethiopia’s power supply while supporting the country’s drive to achieve universal access to affordable, reliable and sustainable electricity.
The project is also expected to improve Ethiopia’s energy security by diversifying its electricity generation mix, which currently relies on hydropower for about 96 per cent of total generation. The diversification is expected to reduce the country’s vulnerability to climate-induced fluctuations in water resources and improve the resilience of its power system.
Commenting on the approval, AfDB’s Director for Energy Financial Solutions, Policy and Regulations, Wale Shonibare, described the project as a landmark investment for Ethiopia’s energy sector.
He said the Aysha Wind Farm demonstrates what can be achieved through collaboration between governments, development finance institutions and private investors to overcome financing challenges.
Shonibare noted that the AfDB, acting as co-mandated lead arranger alongside the International Finance Corporation (IFC), structured a first-of-its-kind financing package for Ethiopia that combines long-term senior debt, concessional financing and innovative risk mitigation instruments, creating a model for future private-sector investments in the country’s power sector.
Beyond expanding electricity generation, the project is expected to deliver significant environmental and socio-economic benefits. It is projected to prevent about 1.39 million tonnes of carbon dioxide (CO₂) emissions over the 25-year contract period.
The wind farm will also create approximately 1,525 direct jobs during construction, 30 permanent operational positions, and an estimated 35,645 indirect jobs across supply chains and related economic activities.
The Aysha Wind Farm aligns with Ethiopia’s National Electrification Programme, its target of achieving universal electricity access by 2030, and the country’s long-term climate commitments. It also supports the AfDB-led Mission 300 initiative, which seeks to provide electricity access to 300 million Africans by 2030.
