The $55 million Second Djibouti-Power System Interconnection Project has been approved by the World Bank’s Board of Executive Directors. The new financing will help Djibouti foster more inclusive economic growth, and strengthen regional integration and energy access.
The Second Djibouti-Power System Interconnection Project aims to enhance regional connectivity through improved low-cost and clean electricity transmission between Ethiopia and Djibouti.
The operation will support the construction of a second double-circuit high voltage electricity power transmission line to connect the high voltage substation at Galafi, at the border with Ethiopia, to Nagad substation, near Djibouti-Ville. This new electricity line will help to stabilise power flows and make the systems more reliable. The project, limited to the Djiboutian side of the interconnection line, will be financed in parallel by the African Development Bank (AfDB) in Djibouti and Ethiopia.
“Increasing power interconnections is particularly important to boost inclusive growth, jobs and the transition to a green economy,” notes Boubacar-Sid Barry, World Bank Resident Representative in Djibouti. “By increasing access to cheaper and cleaner energy, the new project contributes to improving people’s lives and mitigating climate change.”
By increasing the electricity exchange capacity between the two countries, Djibouti will benefit from Ethiopia’s renewable energy surplus, reducing the cost of its thermal production as well as its dependence on fossil fuels. Over time, the project will enable Djibouti to produce and export excess renewable energy, including solar and wind power, within the region, strengthening the country’s position as a regional trade hub. The project is also expected to attract private sector investments and create new jobs and economic opportunities, especially for women.
“Infrastructure investments play an important role in reducing poverty,” says Boutheina Guermazi, World Bank Director of Regional Integration for sub-Saharan Africa, the Middle East, and Northern Africa. “The project will help increase household income and create jobs, not only in Djibouti, but across the Horn of Africa. By strengthening cross-border connectivity, the project contributes towards building a resilient and more prosperous region.”
The World Bank’s Board of Executive Directors approved two new projects totalling $70 million from the International Development Association (IDA), the World Bank’s programme for the poorest countries.
The second operation, the Djibouti Skills Development for Employment Project aims at equipping young Djiboutians with the skills required to access the labour market and ensure better employment prospects for all.
The Project is expected to increase enrollment in technical and vocational education and training programmes from 4,700 to about 8,000 students, of which 40% are women. The operation will support productive skills development programmes based on labour market needs for refugees and vulnerable people so they can have better access to jobs. It will directly link training to labour market opportunities in order to improve employment outcomes as well as the quality, relevance, and efficiency of Djibouti’s training system.
“The new operations are critical to support the priorities of Djibouti’s National Development Programme to promote inclusion, connectivity and institutions for inclusive and sustainable growth,” says Ilyas Moussa Dawaleh, Djibouti Minister of Economy and Finance, in charge of Industry.
The World Bank in Djibouti
The World Bank’s portfolio in Djibouti consists of 16 projects totalling $384 million in financing from IDA. The portfolio is focused on education, health, social safety nets, energy, rural community development, urban poverty reduction, the modernization of public administration, governance, regional infrastructure, and private sector development with an emphasis on women and youth.