The African Development Bank is extending a US$348mn 50-year loan to the governments of Kenya and Ethiopia for the construction of an electricity highway between the two countries.

The US$1.26bn project is co-funded by loans from the French Development Agency (AFD) and the World Bank, as well as equity investments from the Kenyan and Ethiopian governments.

It involves the construction of a 1,068km, 500kV transmission line, as well as associated converter stations at Wolayta-Sodo (Ethiopia) and Suswa (Kenya), with a power transfer capacity of up to 2,000MW.

Due for commissioning in November 2017, the project will contribute to the Eastern Africa Power Pool (EAPP) countries’ social and economic development strategy, using Ethiopia’s hydropower resources to meet the region’s growing electricity needs.

Gabriel Negatu, AfDB’s regional director in charge of East Africa, says: “Our involvement in the project has included a leading role in the preparation of the project and financing some of the feasibility studies required to appraise the project and make it bankable. We have mobilised funds from other development partners in a timely and efficient manner. The project is also perfectly aligned with the climate change mitigation and adaptation strategy of the bank, as it has the potential to replace some fossil-fuelled thermal generation in the East African region.”

According to the AfDB, the project will position Ethiopia as the main powerhouse and Kenya as the main hub for power trade in the East African region, but power will flow in both directions: from Ethiopia to East African countries and the Southern African Power Pool in the short term, and from the Eastern and Southern power pools to Egypt and Sudan in the long run.

Thierno Bah, the AfDB’s senior power engineer, adds: “Power trading will ensure enhanced power security for the EAPP countries and result in cost savings for the electricity companies and ultimately lower tariffs for end users.”