Ethiopia secures US$132M from Danske Bank to fund Assela’s wind power project

A model of a wind turbine with the Siemens Gamesa logo is displayed outside the annual general shareholders meeting in Zamudio, Spain, June 20, 2017. REUTERS/Vincent West - RC17B4262770

ETHIOPIA – Ethiopia has secured US$132 million (€117.3 million loan) from Danske Bank, Denmark’s largest bank to finance the Assela wind power project.

A statement from Danske Bank explained that upon completion, the Assela Wind Power project will feed 100 MW into Ethiopia’s electricity grid.

The Assela wind project is also supported by the African Development Bank (AfDB) which has already released 1.8 million dollars for the technical studies and the environmental and social impact of the future wind farm.

Ethiopian Finance Minister Ahmed Shide signed the loan agreement with Danske Bank on behalf of his government.

Danske Bank was represented by Petterson and Olaf S. Mark Schet, who are the Director and Associate Director of Danske Bank respectively.

A report by Africa Energy Portal explained that the loan granted by Danske Bank is only part of the financing pledged by the Danish government for the Assela wind project.

The remaining €28.7 million (about US$32.23 million) of financing will be provided in the form of a grant from the Danida Business Fund (DBF).

DBF is a fund administered by the Investment Fund for Developing Countries on behalf of the Government of Denmark.

The state-owned Ethiopian Electric Power (EEP), which is developing the project, signed an engineering, procurement and construction (EPC) contract in May 2020 with Spanish based, Siemens Gamesa Renewable Energy.

Siemens Gamesa Renewable Energy will be responsible for the construction of a wind farm about 150 km south of the capital Addis Ababa.

The farm will be loacted on the edge of the Rift Valley near the city of Itaya in the regional state of Oromia and will consist of 29 turbines, with each turbine having a capacity of producing 3.45 MW.

The entire facility will inject 100 MW into Ethiopia’s electricity grid through a substation to be built by EEP with funds the African Development Bank.

The agreement signed between the Ethiopian Electric Power (EEP) and Siemens Gamesa Renewable Energy stipulates that the Danish subsidiary of Siemens Gamesa will control 60% of the development of the project, while Simens Gamesa-Spain (the parent company) will have a 40% stake.

The two subsidiaries of the company are also expected to operate and maintain the Assela wind farm over a period of 5 years.

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