The African Development Bank Group’s Board of Directors has approved $8 million to support a groundbreaking pilot mini-grid program with potential benefits across Africa. The funding, sourced from the Bank-managed Sustainable Energy Fund for Africa (SEFA), will be provided in the form of concessional loans, grants, and risk mitigation, covering up to 50% of the capital expenditures for the Ethiopia Distributed Renewable Energy and Agriculture Modalities (DREAM) program.
DREAM aims to test the commercial viability and effectiveness of integrating mini-grids with agribusiness operations at nine sites across Ethiopia. This first-of-its-kind approach for Africa’s mini-grid industry was developed in collaboration with the Global Energy Alliance for People and Planet (GEAPP), which is co-financing the program, and various Ethiopian ministries, including the Ministry of Water and Energy, Ministry of Irrigation and Lowlands, Ministry of Agriculture, and the Agricultural Transformation Institute.
The successful completion of the pilot could pave the way for scaling up and replicating the model in Ethiopia and other African countries. Dr. Eng. Habtamu Itefa Geleta, Ethiopia’s Minister of Water and Energy, emphasized the importance of this integrated approach. “Water, energy, and food are critical for our sustainable well-being,” he said. “The Ethiopian government is approaching the twin challenges of agricultural productivity and energy access with an integrated approach. We are glad to partner with the African Development Bank, through SEFA, and other project stakeholders on this innovative DREAM pilot.”
Joseph Ng’ang’a, GEAPP’s Interim CEO, highlighted the dual benefits of the program. “GEAPP was created to address two of the defining challenges of our time – ending energy poverty and tackling the climate crisis through a just transition to renewable energy, and DREAM is a great example. Leveraging strategic partnerships, DREAM communities won’t just get electrification but will also gain reliable power for irrigation and clean drinking water, thereby accelerating rural development for close to 300,000 people.”
Dr. Daniel Schroth, the Bank Group’s Director for Renewable Energy and Energy Efficiency, underscored the innovative nature of the project. “The DREAM project provides an innovative approach to addressing the water-energy-food nexus in Ethiopia. It demonstrates the importance of partnerships and the catalytic role played by the Sustainable Energy Fund for Africa (SEFA) in crowding-in private sector investments in energy access.”
This initiative marks a significant step forward in integrating renewable energy solutions with agricultural productivity, potentially transforming rural development and energy access across the continent.
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