The African Development Bank (AfDB) has granted $104m loan to the Ethiopia government to help boost its power industry.

By 2020, Ethiopia intends to increase its electrification rate to 90% to meet growing power demand in the country.

As part of this effort, the country is focusing on grid-based rural electrification, additional off-grid supply options, and the development of transmission and distribution systems.

The new funding will support the development of the Mekele-Dallol and Semera-Afdera Power Transmission Supply for Industrial Development and Access Scale-up Project (MDSAPIAP).

The $122m project intends to provide increased access to affordable and sustainable electricity supply while enhancing service delivery in Ethiopia’s Tigray and Afar states.

In addition to ensuring power supply to remotely located load centers, the project will address power shortages in order to meet the demand.

The MDSAPIAP involves construction of 130km of the 230kV Mekele-Dallol transmission line; 175km of the 230kV Semera-Afdera transmission line; and associated new substations in Dallo and Afdera.

AfDB Energy, Environment and Climate Change Department director Alex Rugamba said: “Domestic infrastructure development and regional integration, especially within the power sector, are fundamental to achieving the goals of the AfDB’s New Deal on Energy for Africa.

“Extending the grid will help to create electricity access, replace diesel with cleaner and more affordable reliable power for industries as well as urban and rural towns around Dallol and Afdera to stimulate economic activities that enhance job creation, improve access to basic services and limit environmental degradation.”

In will also include expansion of the existing Mekele and Semera 230kV substations as well as building medium and low voltage distribution network.

Planned to be completed in 2019, the project will receive $18m from the Government of Ethiopia.