AfDB backs Ethiopia's largest wind power project with $110 million

The AfDB financing package includes up to $80 million from its ordinary resources, $20 million from the Clean Technology Fund and $10 million from the Sustainable Energy Fund for Africa.

The African Development Bank Group (AfDB) has approved a financing package of up to $110 million for the 300-megawatt Aysha Wind Project, marking a major milestone for Ethiopia's renewable energy sector. Once completed, the project will become the country's largest wind power plant and its first wind-based Independent Power Producer (IPP). The project, valued at $508 million, is expected to strengthen Ethiopia's electricity supply, reduce dependence on hydropower and attract greater private investment into the country's clean energy sector.

Landmark investment for renewable energy

The AfDB financing package includes up to $80 million from its ordinary resources, $20 million from the Clean Technology Fund and $10 million from the Sustainable Energy Fund for Africa. The Bank will also help mobilise an additional $381.1 million in debt financing from other development finance institutions.

The wind farm will be developed, owned and operated by AMEA Power near Aysha in Ethiopia's Somali Region. The project includes the construction of a 300 MW wind farm, a five-kilometre transmission line and upgrades to the existing Aysha II substation. Under a 25-year Power Purchase Agreement, Ethiopian Electric Power will purchase all electricity generated by the project and assume ownership of the completed transmission line.

Cleaner power and stronger energy security

The wind farm is expected to generate around 1,189 gigawatt hours of clean electricity each year, helping Ethiopia expand access to reliable and affordable electricity while supporting its goal of achieving universal electricity access by 2030.

The project will also diversify the country's energy mix, which currently relies on about 96% hydropower, making the electricity system more resilient to droughts and other climate-related disruptions that affect water availability.

AfDB Director for Energy Financial Solutions, Policy and Regulations Wale Shonibare described the approval as a landmark for Ethiopia's power sector, saying the financing structure demonstrates how governments, development partners and private investors can work together to overcome investment barriers and create a model for future renewable energy projects.

Jobs and climate benefits

Beyond increasing electricity generation, the project is expected to prevent around 1.39 million tonnes of carbon dioxide emissions over the 25-year operating period.

Construction is projected to create up to 1,525 direct jobs, while the completed project will support 30 permanent operational positions. The wider economic impact is also expected to generate an estimated 35,645 indirect jobs through supply chains and increased economic activity linked to expanded electricity access.

The Aysha Wind Project supports Ethiopia's National Electrification Program, its climate commitments under the Nationally Determined Contribution, long-term net-zero ambitions, and the Mission 300 initiative, which aims to provide electricity access to 300 million Africans by 2030.