Ethiopia and Kenya -- Eastern Electricity Highway Project (APL1)

July 12, 2012

U.S. Position

Despite significant potential for energy generation from various sources such as wind, 

hydropower and geothermal, the East African countries still have the lowest rates of 

household electricity access and per capita electricity consumption in Africa. Less than 25 

and 15 percent of the respective populations of Kenya and Ethiopia have access to electricity, 

and the access rate for the region as a whole is even lower. Therefore, the United States

supports efforts to help address these challenges through well-planned, transformative 

projects that will foster greater regional integration. The World Bank has a comparative 

advantage in financing and supporting such projects. 

The proposed transmission line, alongside the planned subsequent interconnections, will play 

a critical role in developing the East Africa Power Pool (EAPP). As a regional public good it 

has the potential to generate major economic and environmental benefits to the two countries 

and beyond. The project has a number of direct and indirect benefits, some of which are more 

challenging to quantify. These include inter alia increased volume and security of supply, 

cleaner energy generation compared to alternatives, risk management benefits, and greater 

and more affordable access for households and the private sector. 

In light of these benefits to the long term development for the whole region, the United States

supports the Eastern Electricity Highway Project.

The United States encourages the Governments of Kenya and Ethiopia to work together 

effectively to ensure the potential benefits are maximized, including optimising utilisation of 

the total installed capacity of the line. The United States also urges Management to continue 

to work with the two governments to help ensure that their respective power utilities 

implement appropriate and timely reforms that will help secure long-term financial viability 

for this and related projects. The United States looks forward to updates from Management 

on progress in this area, beginning with the first annual review of the Ethiopian Electric 

Power Corporation’s (EEPCo) financing plan due in May 2013 as well as progress by the 

Kenya Electricity Transmission Company (KETRACO) in building its own financial and 

technical management capacity.

Given the complexity and range of environmental, social and cultural issues connected to this 

project, it is important that there are clear commitments from the Ethiopian and Kenyan 

authorities to fully apply safeguards. It is critical that, during implementation, the Bank 

applies its expertise and oversight to ensure adherence to the highest standards, and the 

United States urges Management to prioritise this. The United States would have welcomed 

greater explanation in the loan document on steps to ensure sufficient consultation with civil 

society and project-affected persons and steps to strengthen social accountability. 
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The United States is also cognisant of concerns that have been raised by a range of external 

stakeholders claiming negative cross-border social and environment impacts on communities 

directly affected by the Gibe III dam. In addition, these stakeholders highlighted the potential 

association of this project to Gibe III, as it will contribute to the Ethiopian electricity grid that 

will serve the transmission line. The United States notes the assessment by Staff that the 

transmission line is viable in the absence of Gibe III, and therefore Gibe III is not deemed an 

associated facility to this project. The United States calls upon the Bank to develop, clearer 

guidelines for Staff on what constitutes an associated project or facility. This will help 

determine the necessary coverage of impact assessments.

The United States expects the Bank to use its expertise and role as co-financier of the 

transmission line project to support a responsible approach to safeguard issues. Furthermore 

the United States would expect this approach to extend to any Bank involvement in the 

power sector as the EAPP progresses. Strong governance and sound social accountability 

should be core principles in developing the EAPP. 

The Bank’s role in this emerging regional electricity market is an issue that we expect to 

discuss further in future projects, as well as the forthcoming Country Assistance Strategies 

(CASs) in the Africa Region. The United States also suggests that management give the 

Board an update on the development of the power sector and the Bank’s support to it in the 

Africa region, as the African power sector is an increasingly large and complex portfolio.

With these comments, the United States wishes Management, Staff, as well as the 

Governments of Kenya and Ethiopia successful implementation of the project.