Wednesday, June 12, 2024
BusinessIFC to invest on 500MW solar power

IFC to invest on 500MW solar power

Calls on Ethiopia to exploit USD 2bln financing windows

Amid budgetary support, the World Bank Group (WBG) has approved a commitment of USD 1.2 billion to Ethiopia this week, the International Finance Corporation (IFC) – the private sector arm of the WB – said that it is working on a solar power program that will help generate 500 megawatt of electricity in the country.

In an exclusive interview with The Reporter, Sergio Pimenta, vice president of IFC in the Middle East and Africa said that IFC is running a program called “Scaling Solar” in which the development financier will scale-up investments for the production of 500MW of solar power.

“IFC has launched scaling solar in Ethiopia. The project’s total scale arrays up to 500 megawatts (MW) and the first phase is 250MW. Once completed the solar project is going to be the largest in Africa,” said Sergio Pimenta.

According to Pimneta, the scaling solar program is part of the newly instituted Public Private Partnership (PPP) structure the government of Ethiopia has initiated. “Currently, the process for expression of interest and proposal has been finalized and bid process for the Independent Power Purchase (IPP) scheme is about to commence soon,” Pimenta said.

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In addition to that, the vice president of IFC also called on authorities to capitalize on the recently launched funds for the private sector. Pimenta said that the private sector window with the funds provided by the International Development Association (IDA) totaling USD two billion includes Ethiopia as one of the eligible countries.

“Since last year we have developed a new instrument called ‘the private sector window of the International Development Association (IDA)’. IDA has provided a curved out amount of USD two billion for the private sector for IFC,” Pimenta added. IDA is the development arm of the World Bank in providing funds for poor countries.

Last week, the government of Ethiopia made public the ventures in which the PPP framework is going to gear-up with major projects that require investments of USD 6.5 billion. Out of the 17 mega projects announced, 14 are power projects which include two scaling solar projects that seek a combined 250MW electric power generation. Scaling Solar Gad phase I which is to be developed in the Somali Regional State, will generate 125MW solar energy and will require USD 150 million. Similarly, Scaling Solar Dicheto Phase I will also develop a 125MW power in the Afar Regional State with a stated value of USD 150 million. Hence, IFC will be providing both technical and financial supports to these projects.

It is to be recalled that Teshome Tafesse (PhD), director general of the PPP directorate general office with the Ministry of Finance, said that the board of the PPP has approved 13 major power projects valued at USD 5.3 billion. In addition to the solar power projects, five major hydro projects have been identified to be developed within the PPP platform.

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