Prime Minister Abiy Ahmed on April 16 formally inaugurated the Assela Wind Farm, a 100 MW facility 150 kilometres south of Addis Abeba that began feeding power into Ethiopia's national grid in May 2025. The €146 million project was originally scheduled for commissioning in early 2023.
The wind farm comprises 29 Siemens Gamesa SG 3.4-132 turbines and is owned by the state utility Ethiopian Electric Power. The facility is expected to generate approximately 300 GWh annually when fully operational, enough to supply roughly 140,000 households, according to a May 2025 statement from Denmark's Ministry of Foreign Affairs, which funded the project. The Ethiopian Investment for Africa policy institute placed the site's capacity factor at 34–38 percent, describing it as strong by global onshore wind standards.
The project was financed entirely by Denmark: a €117.3 million concessional loan from Danske Bank via Danida Business Finance, and a €28.7 million grant from Denmark's Investment Fund for Developing Countries. Abiy described the facility at the inauguration as "a gift of the Kingdom of Denmark" and said the project "demonstrates prudent borrowing and investment practices that prevent long-term debt burdens."
Siemens Gamesa originally announced the contract in January 2021 with a commissioning target of early 2023. The company delivered first power in May 2025, roughly two years and four months behind schedule. Neither Ethiopian Electric Power nor the Danish financing partners have published a public accounting of the delays. Construction of the substation feeding the facility into the national grid relied on a separate $10 million loan from the African Development Bank, according to Ethiopian Electric Power.
Speaking at the ceremony, Abiy said Ethiopia's total installed electricity generation capacity had reached 10,000 MW, up from 4,000 MW at the start of what he called the reform period roughly six to seven years ago. The Assela facility's 100 MW contribution represents approximately one percent of that total. Abiy said Ethiopian Electric Power had recorded its first-ever profit — 7 billion birr over six months — and that sector revenue had risen from 7 billion to 75 billion birr. The utility has not yet published audited financial statements covering the referenced period.
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The project's significance lies less in its capacity than in its effect on Ethiopia's generation mix. Ethiopia's electricity supply remains heavily dependent on hydropower, which is vulnerable to seasonal rainfall variation and has produced rolling shortfalls during dry seasons in recent years. Wind generation in the Arsi highlands tends to peak during the dry season, precisely when hydropower output declines. The Ethiopian government has set a target of meeting 100 percent of domestic energy demand through renewables by 2030 and has positioned itself to host COP32 in 2027.
Transmission and distribution losses on Ethiopia's grid remain estimated between 10 and 20 percent, according to the IFA analysis, and roughly half of the country's population still lacks reliable grid access. The government's 2017 National Electrification Program aimed for universal access by 2025, a target that has not been met. The Assela facility is operating alongside the recently inaugurated 120 MW Aysha II wind plant in the Somali Regional State, built with Chinese technology.
The inauguration took place against the backdrop of Ethiopia's deepening debt restructuring impasse. The Official Creditors Committee earlier this month rejected the Ethiopian government's agreement in principle with Eurobond holders, finding that the terms failed the Common Framework's comparability-of-treatment requirement. Ethiopia has been in default on its sovereign debt since December 2023, when it missed a $33 million coupon payment. Danish concessional loans and grants of the type used to finance Assela represent a form of external investment that does not flow through the bondholder channels currently in deadlock — one reason the Assela financing model has drawn interest from Ethiopian officials as a template for other renewable projects.
