The AfDB approved the reimbursable grant from the Sustainable Energy Fund for Africa on July 17 to support two renewable power mini-grids under Ethiopia’s Distributed Renewable Energy and Agriculture Modalities (DREAM) programme.
The financing forms part of an $8 million programme funding envelope for DREAM approved in May 2024. The grant will support the Lelicho and Murche mini-grid sub-projects being developed by RVE.SOL ETH Energy Generation Solutions PLC.
AfDB said the funding will contribute up to 50% of mini-grid project capital expenditure.
The programme was developed in partnership with the Government of Ethiopia, the Global Energy Alliance for People and Planet (GEAPP) and other stakeholders.
DREAM is designed to address the connection between water, energy and food security by combining renewable energy mini-grids with agricultural demand in rural areas.
The programme uses an ABC model, which is based on anchor loads, business demand and community connections. AfDB said the approach improves project economics, strengthens revenue certainty and creates a scalable model for private-sector investment in underserved rural markets.
Ethiopia Minister of Water and Energy Habtamu Itefa Geleta said the initiative supports the country’s broader development goals. “Water, energy and food security are deeply interconnected and fundamental to Ethiopia’s sustainable development,” Geleta said.
Geleta said the programme links clean energy access with irrigation and agricultural productivity. “Through DREAM, Ethiopia is pioneering an integrated approach that combines renewable energy access with irrigation and agricultural productivity,” Geleta said.
Geleta said Ethiopia is pleased to work with AfDB and partners to advance the initiative and “ensure the DREAM becomes a reality”.
AfDB Director for Renewable Energy and Energy Efficiency Daniel Schroth said the project demonstrates how concessional finance can unlock private investment in rural markets. “DREAM demonstrates how innovative partnerships and catalytic concessional finance can unlock private-sector investment in underserved markets,” Schroth said.
Schroth said the programme provides a scalable model that combines energy access, agricultural productivity and climate resilience while supporting jobs, livelihoods and inclusive economic growth.
GEAPP Vice President for Africa Carol Koech said the initiative could accelerate rural development. “DREAM is the kind of integrated solution needed to accelerate sustainable rural development,” Koech said.
Koech said pairing renewable energy with irrigation, market access and financial tools can make rural infrastructure more viable. “We are pleased to partner with AfDB and the Government of Ethiopia to help demonstrate a model that can be scaled across the continent,” Koech said.
–AfDB/ChannelAfrica–
