Ethiopia’s largest wind power project advances following $110 million AfDB funding approval

The African Development Bank (AfDB) Group has officially approved up to $110 million in financing for the 300-megawatt (MW) Aysha wind power project, a milestone expected to significantly bolster Ethiopia’s national grid with clean energy.

The financing package, sanctioned by the Bank’s Board of Directors, comprises $80 million from the African Development Bank, $20 million from the Clean Technology Fund, and $10 million from the Sustainable Energy Fund for Africa (SEFA). This infusion of capital is a critical step toward realizing what is set to become the nation’s largest wind farm.

With an estimated total investment of $508 million, the Aysha project will be developed, owned, and operated by AMEA Power. The project encompasses the design, construction, and long-term operation of a 300 MW facility located in the arid eastern desert of the Somali Region, near the Djibouti border.

The project infrastructure includes the wind farm itself, a 5-kilometer transmission line, and essential upgrades to the existing Aysha II substation. Under a 25-year Power Purchase Agreement (PPA), Ethiopian Electric Power (EEP) will serve as the sole off-taker and owner of the transmission infrastructure.

Finance Minister Ahmed Shide described the project as a “cornerstone of our country’s energy policy,” emphasizing that it serves as a replicable model for Public-Private Partnerships (PPP). “The Aysha project demonstrates what can be achieved when governments, development partners, and private investors work together to solve bankability challenges,” noted Wale Shonibare, the AfDB’s Director of Energy Financial Solutions.

This development builds on the momentum of the Aysha II wind power plant, which saw its first 120 MW phase inaugurated in January 2026 by Prime Minister Abiy Ahmed, alongside the Presidents of Djibouti and Somalia.

The AfDB’s latest approval follows a rigorous selection process that began in December 2023, with formal PPA agreements finalized in August 2024. To achieve the full project financing, the Bank is actively assisting in the mobilization of an additional $381.1 million from various development finance institutions, including a planned $65 million investment from the International Finance Corporation (IFC).

The Aysha I project marks a significant evolution in Ethiopia’s energy strategy, representing the first utility-scale private power project developed under the nation’s revamped PPP framework. Currently, Ethiopian Electric Power is managing a diverse pipeline of over 20 PPP and Independent Power Producer (IPP) projects spanning solar, wind, hydro, and geothermal technologies.