Construction of Assela I Wind Farm in Ethiopian is set to begin after MPs endorsed the concessional loan deal, signed between ministry of finance and officials of Denmark’s biggest bank Danske Bank group in mid-June.
The Assela I Wind Farm will be located about 150Km south of the capital, near Iteya town in Oromia Regional State, and will be constructed by Siemens Gamesa Renewable Energy.
The power project will have a capacity of generating 100MW from 29 wind turbines, and is expected to generate 330,000KWh annually and supply sustainable power to over three million people.
Dr. Seleshi Bekele, Minister of Water, Irrigation and Energy (MOWIE), said Wind Farm will help Ethiopia “diversify its renewable energy mix”.
“I am pleased to see the agreement to develop the Assela I Wind Farm, which will diversify the Ethiopian renewable energy mix, has been passed by the Parliament. I am grateful to the Danish government’s generosity to provide grant and concessional finance. As a capacity development, Ethiopia will also learn and benefit immensely from Danish wind energy companies in terms of generation and operation of wind energy,” said Dr. Bekele,
The contracting amount for the Assela Wind Farm Project amounts to $168.9 million which Danida Sustainable Infrastructure Finance (DSIF) is funding through a concessional finance model consisting of a grant and a loan module.
The Danish contribution accounts for $110 million and covers the cash grant, interest subsidy and loan guarantee.
The cooperation between Ethiopia and Denmark is part of the Danish Government’s goal to create partnerships in obtaining access to energy and sustainable economic growth, in line with SDG 7.
Ethiopia hopes to provide access to electricity for the entire population, 65% from the grid and 35% from solar off-grid technologies. Currently, electricity supply is dominated by hydropower plants due to the huge resource potential at normal periods.
However, power generation is vulnerable during periods of water shortages and widespread drought, causing long periods with power cuts.
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