Eritrea Obtains US$50 Million From World Bank
News Release No:2004/13/AFR
DC, July 8, 2004 – The
World Bank Board of Executive Directors last Tuesday, July 6, approved an
International Development Association (IDA) credit of US$29 million and an IDA
Grant of US$21 million in support of power distribution and rural
electrification in Eritrea.
credit and grant will promote efficiency, safety, environmental protection and
financial sustainability in the power
sector in Eritrea”, said
Paivi Koljonen, the World Bank’s Task Team Leader for the project.
Power Distribution and Rural Electrification Project, as it is known, will
support the Government’s power sector
reform program including the establishment in the country of a modern
institutional and regulatory framework governing electricity production,
transmission, distribution and sales.
project will expand access to electricity, improve the security of electricity
supply, and strengthen institutional capacity within the energy sector”,
Koljonen added, pointing out that this is
particularly important in Eritrea, where access to electricity is low, the
existing power distribution system is old, and sector institutions are
percent of urban households have access to grid electricity in Eritrea, notably
within the capital Asmara, only 3 percent of the rural population has access.
of the project’s four components focuses on rehabilitating and expanding the
40-to-50 year-old Asmara Distribution System for a total US$34 million, of
which US$29 is IDA credit financed.
component aims to extend rural electrification to about 80 villages and small
towns around four main towns – Keren, Barentu, Dekemhare, and Adi Keih – for a
total of US$16.4 million of which US$12.4 million is IDA grant financed.
component consists of the Government of Eritrea establishing a Rural
Electrification Fund to finance capital subsidies to qualifying schemes to
electrify additional villages. This component will be funded through an IDA
component will build institutional and human capacity aimed at promoting
increased efficiency in power sector operations and future cooperative and private sector participation in the
sector for a total of US$4.7 million of
which US$4.5 million is IDA grant financed.
component aims at environmental monitoring and mitigation and is funded for a
total US$520 000 of which US$370 000 is IDA grant financed.
credit is provided at the standard commitment fee of 0.5 percent, a service
charge of 0.75 percent, and a maturity of 40 years, including a 10-year period
of grace. The Government of Eritrea and the Eritrean Electric Corporation will
finance the remaining costs of the project.
Herbert Boh (202) 473 3548
Aby Toure (202) 473 8302
information on the World Bank’s work in sub-Saharan Africa visit: http://www.worldbank.org