Ethiopia to receive $2 million from SEFA for energy-agriculture mini-grid project
The African Development Bank (AfDB) Group’s Board of Directors has approved a $2 million reimbursable grant from the Sustainable Energy Fund for Africa (SEFA) to support two renewable power mini-grids in Ethiopia under the Distributed Renewable Energy and Agriculture Modalities (DREAM) programme, according to a press release. The financing was approved on 17 July and forms part of the $8 million programmatic envelope for DREAM approved in May 2024. It targets the Lelicho and Murche mini-grid sub-projects developed by RVE.SOL ETH Energy Generation Solutions PLC. The grant will contribute up to 50% of mini-grid project capital expenditure. The initiative pioneers an integrated approach linking renewable energy access with rural agricultural productivity.
The DREAM programme was developed in collaboration with the Government of Ethiopia, the Global Energy Alliance for People and Planet (GEAPP), and other stakeholders. It is described as a first-of-its-kind programme addressing the water-energy-food nexus. The initiative seeks to unlock a commercially viable rural electrification model. It combines renewable energy mini-grids with productive-use agricultural demand. The approach targets underserved rural markets across Ethiopia.
At the core of DREAM is the ABC model—Anchor loads, Business demand and Community connections. This structure is designed to improve project economics and strengthen revenue certainty. It also creates a scalable pathway for private-sector investment. The Lelicho and Murche sub-projects will serve as concrete applications of this model. Together, they aim to demonstrate how integrated design can support rural electrification.
“Water, energy and food security are deeply interconnected and fundamental to Ethiopia’s sustainable development,” said Habtamu Itefa Geleta, Ethiopia’s Minister of Water and Energy.
He noted that Ethiopia is pioneering an integrated approach combining renewable energy access with irrigation and agricultural productivity. Daniel Schroth, Director for Renewable Energy and Energy Efficiency at the African Development Bank, said DREAM demonstrates how innovative partnerships and catalytic concessional finance can unlock private-sector investment in underserved markets. Carol Koech, Vice President for Africa at GEAPP, described DREAM as the kind of integrated solution needed to accelerate sustainable rural development. She added that pairing renewable energy with irrigation, market access, and financial tools helps make rural infrastructure economically viable.
SEFA is a multi-donor special fund providing catalytic finance to unlock private sector investments in renewable energy and energy efficiency. It offers technical assistance and concessional finance instruments to remove market barriers and improve the risk-return profile of investments. Its overarching goal is to contribute to universal access to affordable, reliable, sustainable, and modern energy services in Africa. This aligns with Mission 300 and Sustainable Development Goal 7. Through DREAM, partners intend to establish a scalable model applicable across the continent.