The Ethiopian House of Peoples Representatives approved two loan agreements totaling USD 479 million appropriated for regional infrastructure development on last Thursday before it goes on for recess.The House approved the loan agreements extended by the International Development Association (IDA) to finance almost half the project cost to develop the East African Regional grid line, and a USD 236.4 million loan from African Development Fund (ADF) to partly finance the the Ethio-Kenya High Voltage Transmission grid line. The loan agreement accrues zero interest rate and will be due in 40 years including the grace period.

It is believed that the loan agreements will further Ethiopia's bid to establish itself as a lead  provider of electricity in the region. Five East African countries, Kenya, Burundi, Tanzania, Uganda and Rwanda are expected to benefit from the Eastern Africa electricity Highway project. The second phase of the power-purchase agreements with other regional countries is expected to be finalized soon with Tanzanian authorities reportedly approached by their Ethiopian counterparts. Djibouti and Sudan are already connected to the Ethiopian National Power Grid.

The project is also expected to enable electric power sharing between the countries so as to reduce energy costs, promote sustainable and renewable power generation, as well as paving the way for more dynamic regional cooperation between East African countries.

The East Africa power integration program, estimated to cost USD 1.3 billion at its completion is expected to benefit more than 212 million people living in the five countries of the region, which currently have a combined Gross Domestic Product of USD 107 billion.

Source: Capital