Ethiopia seeks €400 million from Italian banks for Koysha dam

Ethiopia is negotiating with three Italian banks to secure €400 million in loans to complete the 1,800-megawatt Koysha hydroelectric dam. Ashebir Balcha, CEO of Ethiopian Electric Power, stated that the loan agreement is expected to be signed in October. To supplement this, the government aims to raise an additional €100 million through domestic markets.

The €3 billion project has been under construction since 2016 and is currently approximately three years behind schedule. The delay is attributed to financing difficulties stemming from Ethiopia’s ongoing efforts to restructure roughly $4.5 billion in external debt following a 2023 eurobond interest default.

Once finished, the Koysha dam is expected to generate approximately 6,460 gigawatt-hours of electricity annually. The project will also create a 200-square-kilometer artificial lake intended to support local tourism and economic activity. This initiative follows the recent activation of the Grand Ethiopian Renaissance Dam, as the nation seeks to expand its energy capacity and industrial support.