Ethiopia's electrical network will be strengthened and expanded, the industry's financial viability will be enhanced, and the private sector will be able to participate in the program to enable the generation of renewable energy.
"To effectively address interconnected structural and operational difficulties and convey a clear message to the private sector, Ethiopia's electrical sector transformation calls for a medium-term strategy. According to Wendy Hughes, Regional Director for Infrastructure at the World Bank for Eastern and Southern Africa, "Through this program, the World Bank will work with Ethiopia over the next ten years, providing a financing envelope of up to $1.4 billion to help the government bring in other development partners and the private sector."
The program called Power Sector Reform, Investment and Modernization in Ethiopia (PRIME) will be carried out in multiple stages. In order to increase the ability of energy utilities to add new connections generally, the first phases will prioritize important reforms to the industry and investments in infrastructure. The program's later stages will concentrate on encouraging private sector involvement in the electricity industry by utilizing the single World Bank strategy. A $522 million International Development Association* (IDA) credit was approved by the World Bank for the first phase's implementation.
Increasing Ethiopia's resistance to climate change is a key component of PRIME. Ethiopia is susceptible to natural calamities caused by climate change. The industry is susceptible to hydrological fluctuations because hydropower plays a major role in the production of electricity. The initiative will assist the nation in expanding the utilization of its abundant but underutilized clean energy resources, such as geothermal, wind, and solar power.
"PRIME is expected to significantly contribute to modernizing and strengthening Ethiopia's power sector by increasing generation from renewable resources, mobilizing private capital, and significantly improving the quality of electricity service." The World Bank's Country Director for Ethiopia, Eritrea, South Sudan, and Sudan, Ousmane Dione, stated that this is necessary to maintain the nation's rapid electrification pace. Over the course of the program's lifetime, the country's whole population may be supported by it along with other current and future energy projects.