Djibouti boosts domestic power by 50% with new 60 MW wind farm

Djibouti launched a 60 megawatt (MW) wind farm on Friday, increasing the Horn of Africa country's power production by almost 50% and reducing its heavy reliance on imported electricity. The $122 million Red Sea Power (RSP) wind farm near Lake Goubet, which was announced in 2020, will avert 252,500 tonnes of CO2 emissions annually, according to the consortium of investors that includes the Africa Finance Corporation, the Dutch entrepreneurial development bank (FMO) and blended finance firm Climate Fund Managers.

Djibouti launched a 60 megawatt (MW) wind farm on Friday, increasing the Horn of Africa country's power production by almost 50% and reducing its heavy reliance on imported electricity.

The $122 million Red Sea Power (RSP) wind farm near Lake Goubet, which was announced in 2020, will avert 252,500 tonnes of CO2 emissions annually, according to the consortium of investors that includes the Africa Finance Corporation, the Dutch entrepreneurial development bank (FMO) and blended finance firm Climate Fund Managers. Local power generation for Djibouti's 1.1 million people has until now been entirely generated by burning fossil fuels, with 60-80% of consumed power sourced from neighbouring Ethiopia.

"The new plant will play a pivotal role in the battle against climate change," said Samaila Zubairu, President of the Africa Finance Corporation. The electricity generated is to be sold under a long-term power purchase agreement to Electricite de Djibouti (EDD), the national state-owned utility.

The investment consortium has agreed to finance a further 45 MW expansion of the wind farm, and Zubairu told Reuters he believed the site had the potential to produce 300 MW. To reduce risks, the project was financed using an equity bridge loan that was kept in place until construction of the wind farm was completed. The World Bank also provided political risk cover for the Djibouti government's obligations.

Zubairu said he hoped the project would help the case for building a "green industrial zone" in Djibouti centred on the shipping industry, given the tiny country is located on one of the world's busiest maritime sea routes. "Now there is energy that is here, energy that is green, people can see how they can plug into it," he said.

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