The World Bank on Thursday approved loans totaling $684 million for Ethiopia and Kenya to finance a cross-border power line, the first phase of a $1.3 billion project to develop a regional power grid in East Africa.
The World Bank said the financing — $243 million for Ethiopia and $441 million to Kenya — will allow Ethiopia to sell surplus power needed in Kenya, which faces severe power shortages as its economy blossoms from new oil and gas discoveries.
Oil and gas exploration in East Africa has surged in recent years, with hydrocarbon discoveries in Mozambique, Kenya, Tanzania and Uganda transforming the region.
The electricity will originate from a large number of existing and future power plants in Ethiopia, the World Bank said in a statement.
“It will expand access and lower the cost of electricity supply to homes and businesses across Kenya and help to reduce thermal power emissions in Kenya, a clear benefit to the region’s environment,” said Makhtar Diop, World Bank vice president for Africa.
An estimated one in three people in Africa has access to electricity.
The World Bank said Ethiopia would benefit from additional revenue from the sale of electricity to Kenya. Both countries will be able to create jobs from the construction and installation of the power lines, it added.