World Bank backs Eastern Africa power grid integration with $1.6bn programme

Eastern Africa is set to deepen cross-border power flows and accelerate decarbonisation after the World Bank Group approved a $1.6bn financing package for a new 10-year programme to integrate power markets and expand access to reliable electricity across the region.

The Regional Energy Transmission, Trade and Decarbonization Programme for Eastern Africa (RETRADE-EA) will finance transmission infrastructure and institutional reforms needed to strengthen grid resilience and facilitate the integration of countries that remain outside the network, including Somalia.

RETRADE-EA forms part of Mission 300, a World Bank and African Development Bank (AfDB) initiative launched in 2024 aimed at providing electricity access to 300mn Africans by 2030. As of mide-June, it had connected more than 50mn people to electricity across 40 African countries.

The programme will also support the launch of the Eastern Africa Power Pool's (EAPP) Day-Ahead Market, strengthen system planning and operations, harmonise regulations and encourage private sector participation, including through Independent Transmission Projects.

“A well-integrated regional energy market is one of the most powerful catalysts for economic growth and job creation in Eastern Africa,” Ndiamé Diop, World Bank regional vice president for Eastern and Southern Africa, said in a statement on June 18.

“RETRADE will help countries trade power across borders, lowering costs and improving reliability for businesses and households. In doing so, it delivers exactly what Mission 300 is designed for: stronger energy systems that provide access at scale, drive job creation, and sharpen Africa's competitiveness.”

The first phase includes the Uganda-Tanzania Interconnector Project (UTIP), which will receive $250mn in concessional financing from the International Development Association (IDA). The project will fund construction of a new 400-kV double-circuit transmission line stretching about 260km from Wobulenzi through Masaka to Mutukula on the Tanzania border.

Uganda's installed electricity capacity exceeds 2,000MW, largely supplied by hydropower stations such as Karuma, Isimba and Bujagali. Domestic demand has lagged capacity growth, leaving surplus electricity available for export and making cross-border sales increasingly important for improving utilisation rates and generating foreign exchange earnings. The new line will provide transfer capacity of 1,000MW and connect Uganda's surplus generation to neighbouring markets.

“Uganda has abundant clean energy, and this project turns that advantage into real economic opportunity,” Diop said.

“By connecting Uganda to regional electricity markets, we are helping the country earn more from the power it already produces, while delivering cleaner, more reliable electricity to millions of people. This is infrastructure that works for Uganda's future and that of the region.”

The first phase also includes a $10mn IDA grant and a further $3.5mn grant from the Energy Sector Management Assistance Program for the EAPP's Regional Power Trade and Market Project. The initiative is expected to strengthen market coordination and institutional capacity, enabling more than 5,000GWh of cross-border electricity exchanges annually by 2031.

“By completing the remaining regional interconnections and operationalizing the Eastern Africa Power Pool Day-Ahead Market, RETRADE-EA will help realize a fully operational regional power pool,” said James Karari Wahogo, secretary general of the EAPP.

“Together, these measures will enable more efficient electricity trade, lower system costs, and strengthen regional energy security.”

The planned Day-Ahead Market will allow utilities to buy and sell electricity one day in advance, improving efficiency and enabling countries with surplus generation to supply markets facing shortages.

By 2031, annual electricity exchanges between Uganda and Tanzania alone are expected to reach at least 452GWh. Across the wider EAPP, greater use of Uganda's hydropower is projected to displace thermal generation and avoid approximately 25.8mn tonnes of carbon dioxide emissions.

The EAPP comprises 13 member countries and forms part of broader efforts to create interconnected power systems across Africa. It brings together Burundi, the Democratic Republic of the Congo (DRC), Djibouti, Egypt, Ethiopia, Kenya, Libya, Rwanda, Somalia, Sudan, South Sudan, Tanzania and Uganda. The programme also seeks to deepen links with the Southern African Power Pool (SAPP), potentially creating one of the world's largest interconnected electricity markets and allowing greater sharing of renewable energy resources across the continent.

RETRADE-EA will also promote Independent Transmission Projects, a model that allows private investors to finance, build and operate transmission infrastructure. The approach is intended to mobilise private capital into a segment traditionally dominated by state utilities.