ADF Approves $23.36m Grant to Scale Clean Electricity in Somalia

The African Development Fund has approved a $23.36 million grant to expand access to clean and reliable electricity in Bosaso, a major commercial centre in northern Somalia, as part of efforts to reduce energy costs and strengthen the country’s power sector.

In a statement seen by AEP on November 16, the funding will support the Rehabilitation and Expansion of the Bosaso Power Grid and the strengthening of energy sector institutions. It comprises $9.62 million from the African Development Fund and $13.74 million from the Transition Support Facility.

The project will finance new solar power generation, extend Bosaso’s electricity distribution network and deploy modern metering systems to improve efficiency and consumption management. It will also provide solar home systems to households that have never been connected to electricity, including internally displaced people living in vulnerable conditions.

Somalia remains one of the world’s least electrified countries, with roughly half of its population lacking access to power. Electricity supply is dominated by diesel generators, making tariffs among the highest on the continent and exposing communities to pollution and frequent outages. Limited institutional capacity has further constrained effective regulation and long-term planning in the sector.

According to the African Development Bank Group, the new investment will to lower electricity costs, improve reliability and support local economic activity. Small businesses, markets and service providers in Bosaso are expected to benefit from steadier power, while households gain improved access to basic services such as lighting and refrigeration.

The project will also support job creation through construction activities and longer-term roles in system operation and maintenance. In parallel, it will strengthen public institutions through technical assistance and training, aimed at improving governance and oversight of Somalia’s energy sector.

By replacing diesel-based generation with solar power and battery storage, the initiative will cut carbon emissions and contribute to Somalia’s longer-term climate and energy transition goals.