Ethiopia and Denmark have signed a loan agreement where the later will provide finance in order of USD 201 million for the construction of the Assela Wind Farm.
The agreement was signed this week between Ambassador Mette Thygesen of Denmark and Admasu Nebebe, state Minister of Finance and Economic Cooperation (MoFEC).
The USD 201 million in finance will be provided by the Danish International Development Agency which will be directly injected to Assela wind farm project.
Once it is completed, Assela wind farm is expected to generate 100 MW power and its construction is expected to commence as of this year and will last until 2025.
This would result in increased potential for access to affordable, reliable and modern energy for Ethiopia, said a concept paper of the project presented in 2017. According to the paper, the farm is anticipated to produce 330,000 kWh per year-the equivalent of electric power supply to approximately 500,000 persons at a cost of less than € 0.09 per kWh.
The paper has also identified some social and environmental concerns that need to be addressed once the project commences offically.
“Risks and assumptions relating to land issues have been identified. The feasibility study included an environmental and social impact assessment conducted in consultation with authorities and the community. Whereas there would be some permanent negative impact relating to noise and destruction of habitat of some fauna at the site of the project–an area of around 30 to 50 hectares,” reads the paper.
“The major risk relates to the need for acquisition of this land and resettlement of some 20 to 30 households which depend on the land for their livelihood.”
The project is part of the Ethiopian government’s plan to increase its electricity power generation from the current 4,200 MW to about 17,250 MW by 2020. The power mainly will come from using hydro, wind, geothermal, biomass and solar energy.
In this regard, 1,224 MW is expected to come from wind farms.