Multinational - The Power Interconnection Project (Grant to provide supplementary funding to the Republic of Djibouti)

This intervention concerns the additional loan needed by the Djiboutian side for the Ethiopia-Djibouti Power Interconnection Project. The additional loan is intended to cover the additional costs arising from (a) substantial worldwide increase in price for various items of the project component and (b) unexpected high growth demand in Djibouti which necessitated construction of a double circuit transmission line instead of a single circuit originally envisaged. This project deals with the interconnection of electricity grids between Ethiopia and Djibouti with the aim of making possible power trade between the two countries and allow the sharing of cheap hydropower resources of Ethiopia. As such, the project should help reduce the cost of energy and contribute to poverty reduction by encouraging industrial and commercial development that should create jobs in both countries. The project comprises the following components: (A) Development of Power Transmission Network (construction of transmission lines and substations); (B) Electrification of Border Towns; (C) Project Supervision and Management; and (D) Institutional Support to EdD (Electricité de Djibouti) and Ethiopian Electric Power Corporation (EEPCO).