The African Development Bank (AfDB) has approved a US $2M reimbursable grant from the Sustainable Energy Fund for Africa (SEFA) to support the development of two renewable energy mini-grid projects in Ethiopia, as the country expands electricity access while promoting climate-smart agricultural development.
The funding, approved by the Bank’s Board of Directors is part of an US $8M financing package allocated to the Distributed Renewable Energy and Agriculture Modalities (DREAM) programme, which received approval in May 2024. The latest grant will help finance the Lelicho and Murche mini-grid projects being developed by RVE.SOL ETH Energy Generation Solutions PLC, covering up to 50% of the projects’ capital costs.
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DREAM programme
The DREAM programme is designed to integrate renewable energy generation with agricultural production, creating a commercially sustainable model for rural electrification. By linking clean energy with productive activities such as irrigation, the initiative aims to improve energy access while supporting food production and strengthening water management in underserved communities.
Central to the programme is its “ABC” approach, which combines anchor customers, business demand and community electricity connections to improve project revenues and attract greater private-sector investment. The model is intended to enhance the financial viability of rural mini-grids while creating opportunities for long-term economic development.
Ethiopia’s Minister of Water and Energy, Habtamu Itefa Geleta, said the initiative demonstrates the country’s commitment to addressing the interconnected challenges of water, energy and food security through an integrated development strategy. He added that collaboration with the African Development Bank and development partners would help scale renewable energy solutions that also improve agricultural productivity.
Daniel Schroth, Director for Renewable Energy and Energy Efficiency at the African Development Bank, said the programme illustrates how concessional financing and strategic partnerships can mobilise private investment in rural energy infrastructure. He noted that the initiative supports not only electricity access but also job creation, climate resilience and inclusive economic growth.
Carol Koech, Vice President for Africa at the Global Energy Alliance for People and Planet (GEAPP), said combining renewable energy with irrigation, improved market access and financial support can increase the economic sustainability of rural infrastructure while strengthening livelihoods. She added that the programme has the potential to serve as a model for similar projects across Africa.
Managed by the African Development Bank, SEFA is a multi-donor special fund that provides concessional finance and technical assistance to accelerate private investment in renewable energy and energy efficiency projects across the continent. The fund supports efforts to expand access to affordable, reliable and sustainable energy while contributing to the goals of Mission 300 and the United Nations Sustainable Development Goal 7
