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African Development Fund Approves USD 23.36 Million Grant to Power Bosaso with Clean Energy

The funding will support the Rehabilitation and Expansion of Bosaso Power Grid and Strengthening of Energy Sector Institutions project. The African Development Fund will provide USD 9.62 million, while the Transition Support Facility will contribute USD 13.74 million.

December 20, 2025. By Abha Rustagi

The Board of Directors of the African Development Fund has approved a USD 23.36 million grant package to expand access to clean, reliable electricity in Bosaso, Somalia, marking a major boost for the city’s energy infrastructure and economic resilience.

The funding will support the Rehabilitation and Expansion of Bosaso Power Grid and Strengthening of Energy Sector Institutions project. The African Development Fund will provide USD 9.62 million, while the Transition Support Facility will contribute USD 13.74 million.

The project will add new solar power generation capacity, expand Bosaso’s electricity distribution network, and deploy modern electricity meters to help households manage consumption more efficiently. It will also deliver solar home systems to families who currently live without electricity, including internally displaced people residing in highly vulnerable conditions.

Somalia remains among the countries with the lowest electricity access rates globally, with nearly half of its population lacking power. Those connected to the grid often pay some of the highest electricity tariffs in the region, as diesel generators dominate power generation. These systems drive up costs, increase pollution, and provide unreliable supply, constraining household well-being and local business growth. Limited technical and financial capacity further weakens government oversight of the energy sector.

Bubacarr Sankareh, the African Development Bank Group’s Lead Operations Advisor for Somalia, said the project will deliver tangible benefits to communities and businesses in Bosaso. “This project will change lives in Bosaso for families and small businesses. It will make electricity cheaper, cleaner, and more reliable and is a major step toward a stronger and more resilient energy future for Somalia,” he said.

The improved power supply is expected to lower electricity costs and enhance reliability for residents and enterprises alike. Markets, small shops, and service providers will gain from stable power, while households will benefit from better lighting, refrigeration, and access to essential services. Cleaner energy sources will also reduce air pollution and improve living conditions, particularly in densely populated neighbourhoods.

Beyond energy access, the project will generate employment during construction and create long-term jobs in operations and maintenance. It will also strengthen public institutions through technical training and capacity building, enabling Somalia to plan, regulate, and manage its energy sector more effectively.

Environmentally, the transition from diesel generators to solar power combined with battery storage will significantly cut carbon emissions, supporting Somalia’s long-term climate and sustainability goals.

Tags:

Business

African Development Fund

Bosaso

Somalia

Rehabilitation and Expansion of Bosaso Power Grid

Solar power generation