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World Bank, AFDB to Fund $1.26 Billion Ethiopia-Kenya Power Line

May 7 (Bloomberg) -- The World Bank and African Development Bank will provide 80 percent of the funds needed for a $1.26 billion line that will take power to Kenya from Ethiopia.

The World Bank will lend the countries $684 million for the 1,070-kilometer (665-mile) line that will run from Wolayta-Sodo in Ethiopia to Suswa, 100 kilometers northwest of the Kenyan capital, Nairobi, African Development Bank Regional Director Gabriel Negatu told reporters today in the city. The AFDB is lending $338 million, he said.

“The interconnection with Ethiopia will ensure access to reliable and affordable energy to around 870,000 households by 2018,” Negatu said.

Four out of every five Kenyan households light their homes with kerosene lamps because they aren’t linked to the national grid, which doesn’t reach many rural communities. Ethiopia, which according to the World Bank has the highest hydropower potential in Africa after the Democratic Republic of Congo, hopes to finish the self-funded $5 billion Nile dam in 2018, which will be the continent’s biggest power plant.

Kenya plans to spend as much as $50 billion over the next 20 years to meet a 14 percent annual increase in electricity demand, according to the country’s energy regulator. The nation, which has East Africa’s biggest economy, will need 16,905 megawatts annually by 2031 from 1,520 megawatts this year, the regulator said.

The line will have capacity to carry 2,000 megawatts, with the power sources from hydroelectric projects in Ethiopia, Negatu said. One megawatt is enough electricity for 500 to 1,000 U.S. homes.

Agence Francaise de Developpement, the French agency that provides financing to emerging-market countries, will make $118 million available for the project, while Kenya will contribute $88m and Ethiopia $32 million, Negatu said.

Construction of the line will start in September, he said.

To contact the reporter on this story: Eric Ombok in Nairobi at eombok@bloomberg.net

To contact the editor responsible for this story: Shaji Mathew at shajimathew@bloomberg.net

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