By: Addis Standard

The African Development Bank (AfDB) Group has approved a financing package of up to $110 million to support the development of the 300 MW Aysha Wind Project in Ethiopia’s Somali Region, marking the country’s first wind-based Independent Power Producer (IPP) and, once completed, its largest wind power plant.

According to the Bank, the project, with an estimated total cost of $508 million, will be developed, owned and operated by AMEA Power under a 25-year Power Purchase Agreement, with Ethiopian Electric Power (EEP) serving as the sole off-taker. The financing package includes up to $80 million from the AfDB, $20 million from the Clean Technology Fund, and $10 million from the Sustainable Energy Fund for Africa, while the Bank will also mobilize an additional $381.1 million in debt financing from other development finance institutions.

It is recalled that in December 2023, the Ethiopian government signed an agreement with AMEA Power to develop the 300 MW Aysha Wind Project in the Somali Region. At the time, the project, valued at approximately $600 million, was billed as the largest onshore wind power project in Ethiopia and the Horn of Africa. Spanning 18,000 hectares, it was projected to generate about 1.22 terawatt-hours of electricity annually and create around 2,000 jobs during its construction and operational phases, while significantly expanding the country’s renewable energy capacity.

The greenfield project will include the construction of a 300 MW wind farm, a five-kilometer transmission line, and upgrades to the existing Aysha II substation. Once operational, the plant is expected to generate about 1,189 GWh of electricity annually, helping diversify Ethiopia’s power mix, which currently relies on hydropower for about 96% of generation.

Describing the approval as “a watershed moment for Ethiopia’s power sector,” Wale Shonibare, the Bank Group’s Director for Energy Financial Solutions, Policy, and Regulations, said, “Aysha shows what is possible when governments, development partners and private sponsors work together to solve bankability challenges head-on.“

He added that the Bank and the International Finance Corporation had structured “a first-of-its-kind financing package for Ethiopia“ combining long-term debt, concessional finance, and risk mitigation mechanisms to create “a replicable template for future power sector investments.”

The Bank said the project is expected to avoid approximately 1.39 million tons of CO₂ emissions over the life of the agreement while creating up to 1,525 construction jobs, 30 permanent operational positions, and an estimated 35,645 indirect jobs.

The approval comes as Ethiopia continues expanding its wind energy portfolio. In May 2025, the 100 MW Assela Wind Farm began supplying electricity to the national grid, with full generation expected by the end of that year. 

More recently, on 31 January 2026, Prime Minister Abiy Ahmed inaugurated the Aysha-II Wind Power Project in the Somali Region, a public renewable energy project equipped with 48 wind turbines, each with a capacity of 2.5 MW, and expected to generate 467 GWh of electricity annually. At the inauguration, Abiy described Aysha-II as “a landmark investment in Ethiopia’s renewable energy agenda” and “a cornerstone of our energy security strategy,” adding that the wind corridor’s proximity to neighboring countries would help position Ethiopia as a regional energy trade hub. 

The newly approved 300 MW Aysha Wind Project, backed by the African Development Bank and to be developed by AMEA Power as Ethiopia’s first wind-based Independent Power Producer, is expected to build on that momentum by significantly expanding private-sector participation in renewable energy while advancing the country’s goal of universal electricity access by 2030.