The Board of Directors of the African Development Bank Group (the Bank Group) has recently approved a financing package of up to $110 million to support the development of the 300 MW Aysha Wind Project, Ethiopia’s first wind-based Independent Power Producer (IPP) and, once completed, the country’s largest wind power plant.
The project’s estimated cost is $508 million. The Bank Group is providing a loan package that includes up to $80 million from the ADB window, $20 million from the Clean Technology Fund and $10 million from the Sustainable Energy Fund for Africa. The Bank will also help mobilise an additional debt package of $381.1 million from other development finance institutions.
Developed, owned and operated by AMEA Power, the project entails the design, construction, operation, and maintenance of a 300 MW greenfield wind farm near Aysha in Ethiopia’s Somali Region. It will also support construction of a 5-kilometre transmission line and upgrades to the existing Aysha II substation. Under a 25-year Power Purchase Agreement, Ethiopian Electric Power will be the sole off-taker and will take ownership of the completed transmission line.
The plant is expected to generate approximately 1,189 Gigawatt hours of clean electricity annually, contributing significantly to Ethiopia’s power supply and supporting the achievement of national universal electricity access through clean, reliable, and affordable electricity. The project will also bolster Ethiopia’s energy security by diversifying its generation mix, which is currently 96% dependent on hydropower. This will increase the power system’s resilience against climate-related hydrological variability and make it more reliable overall.
Wale Shonibare, the Bank Group’s Director for Energy Financial Solutions, Policy, and Regulations Department, described the project approval as a watershed moment for Ethiopia’s power sector.
“AYSHA SHOWS WHAT IS POSSIBLE WHEN GOVERNMENTS, DEVELOPMENT PARTNERS AND PRIVATE SPONSORS WORK TOGETHER TO SOLVE BANKABILITY CHALLENGES HEAD-ON,” SHONIBARE SAID.
“AS CO-MANDATED LEAD ARRANGER ALONGSIDE INTERNATIONAL FINANCE CORPORATION, WE HAVE STRUCTURED A FIRST-OF-ITS-KIND FINANCING PACKAGE FOR ETHIOPIA WHICH COMBINES LONG-TENOR SENIOR DEBT, CONCESSIONAL FINANCE AND PIONEERING RISK MITIGATION MECHANISMS CREATING A REPLICABLE TEMPLATE FOR FUTURE POWER SECTOR INVESTMENTS.”
The plant is expected to deliver substantial climate benefits, averting approximately 1.39 million tons of CO₂ emissions over the 25-year agreement period. It will also create up to 1,525 direct jobs during the construction period and 30 permanent operations jobs alongside an estimated 35,645 indirect supply chain and related jobs arising mainly from the GDP growth generated by the country’s additional electricity capacity.
The project directly supports Ethiopia’s National Electrification Program and the country’s goal of achieving universal electricity access by 2030, as well as its Nationally Determined Contribution and long-term net-zero ambitions, by accelerating private sector-led investment in renewable energy. It also fully aligns with the Mission 300 target of providing electricity access to 300 million Africans by 2030.
