fdA*I Y"Cowg AUDIT SERVICES
MRAWA4 ?'C7ddi7 CORPORATION
MINISTRY OF WATER AND ENERGY
ACCESS TO DISTRIBUTED ELECTRICITY AND LIGHTING IN
ETHIOPIA
(ADELE) PROJECT
IDA CREDIT NO.6857, PARTS 3.1 AND 5.2
INDEPENDENT AUDITOR'S REPORT
AND
FINANCIAL STATEMENTS
7 JULY 2024
(1UJY4A P' ',%'VC ovl-A)eg R+,
-In fC0aM, h7A7Ar~h?&1
Office of the Federal Auditor General
Audit Services Corporation
INDEPENDENT AUDITOR'S REPORT TO THE
SUPERVISING AUTHORITY OF
MINISTRY OF WATER AND ENERGY
We have audited the financial statements of Ministry of Water and Energy, Access to
Distributed Electricity and Lighting Ethiopia (ADELE) Project, financed under IDA Credit
No. 6857-ET, Parts 3.1 and 5.2 which comprise the balance sheet as at 7 July 2024 and the
statement of sources and uses of funds and the Designated Account statement for the year
ended 7 July 2024, and a summary of significant accounting policies and other explanatory
information.
Chief Executive Officer's Responsibility for the Financial Statements
The Chief Executive Officer of Ministry of Water and Energy is responsible for preparation
of financial statements that give a true and fair view under the modified cash basis of
accounting as described in note 2 to the financial statements and for such internal control as
management determines is necessary to enable the preparation of financial statements that are
free from material misstatement, whether due to fraud or error.
Auditor's Responsibility
Our responsibility is to express an opinion on these financial statements based on our audit.
We conducted our audit in accordance with International Standards on Auditing. Those
standards require that we comply with ethical requirements and plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free from material
misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and
disclosures in the financial statements. The Procedures selected depend on the auditor's
judgment, including the assessment of the risks of material misstatement of the financial
statements, whether due to fraud or error. In making those risk assessments, the auditor
considers internal control relevant to the entity's preparation and fair presentation of the
financial statements in order to design audit procedures that are appropriate in the
circumstances, but not for the purpose of expressing an opinion on the effectiveness of the
entity's internal control, An audit also includes evaluating the appropriateness of accounting
policies used and the reasonableness of accounting estimates made by management, as well
as evaluating the overall esentation of the financial statements.
t 251-011-5515222 Fax 251-011-5513083 E-mail asegaseethiopia,e0n] 25720
251-011-5535012 Website sww.ascethpiaom
251-011-5535015
251-011-5535016
INDEPENDENT AUDITOR'S REPORT TO THE
SUPERVISING AUTHORITY OF
MINISTRY OF WATER AND ENERGY (continued)
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a
basis for our audit opinion.
Opinion
In our opinion, the financial statements give a true and fair view of the financial position of
Ministry of Water and Energy, Access to Distributed Electricity and Lighting Ethiopia
(ADELE) Project, financed under IDA Credit No. 6857-ET, Parts 3.1 and 5.2 as at 7 July
2024 and of its sources and uses of funds for the year ended 7 July 2024 in accordance with
the modified cash basis of accounting described in note 2 to the financial statements.
Report on Other Requirements
In our opinion
- during the period IDA funds have been used in accordance with the conditions of the
relevant financing agreement and only for the purposes for which the financing was
provided;
- counterpart funds have not been provided and used in accordance with the financing
agreement;
- goods, works and services financed have been provided in accordance with the
relevant financing agreement and disbursement letters:
- all necessary supporting documents, records and accounts have been maintained in
respect of all activities of the program;
- the funds disbursed covered expenditures that are eligible for financing under IDA
Credit No.6857;
- Financial performance of the program is satisfactory;
- our examination revealed no weaknesses or irregularities in the systems of internal
controls over financial expenditure except the finding in the management letter and:
- the Designated Account has been maintained in accordance with the provisions of the
financing agreement and funds disbursed out of the said Account were used only for
the purposes intended in the financing agreement.
19 December 2024
2
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MINISTRY OF WATER AND ENERGY (MoWE)
ADELE CRE DIT NO.6857-ET
Parts 3.1 and 5.2
DESIGNATED ACCOUNT STATEMENT
For period ended 7 July 2024
Acrount number 0102001300007
Depository bank National Bank of Ethiopia
Address Addis Ababa, Ethiopia
Related credit IDA 6857- ET
Curroncy USD
Eguivalent in
USD Birr
Balance as at 7 July 2023 306,422.41 16,741,970
Additiona; fund 4,098,527.00 233,343,573
4,404,949.41 250,085,543
less transfer to Birr (701,760.85 (40,260,090
3,703,187.56 209,825,453
Gain on foreign exchange 5,884,180
Ending balance 7 July 2024 3,703,187.56
5
MINISTRY OF WATER AND ENERGY
ACCESS TO DISTRIBUTED ELECTRICITY & LIGHTING IN ETHIOPIA (ADELE)
PROJECT
IDA CREDIT No.6857, Parts 3.1 and 5.2
NOTES TO THE FINANCIAL STATEMENTS
7 JULY 2024
1. PROJECT INFORMATION
Two financing agreements were signed on 23 April 2021 between the Federal
Democratic Republic of Ethiopia and the International Development Association (IDA)
to finance the implementation of Ethiopia Electrification Project.
The objective of the Project is to increase access to reliable electricity for households,
social institutions, and enterprises in Ethiopia.
As per the financing agreements, IDA agrees to provide the amount a credit in an amount
equivalent to SDR 347,100,000 under Credit No.6857-ET,
The Project will be implemented in conjunction by The Ministry of Water and Energy
(MoWE), the Ethiopian Electric Utility (EEU), and the Development Bank of Ethiopia
(DBE). Ministry of Water and Energy, the Program Implementing Entity, will carry out
Parts 3.1 and 5.2 of the Program. Furthermore, a subsidiary agreement was signed on the
same date between the Ministry of Finance and EEU to facilitate the implementation of
the Program.
The Project became effective on 23 April 2021 and is expected to be closed on 31 March
2027.
2. SIGNIFICANT ACCOUNTING POLICIES
a) Basis of preparation
These financial statements have been prepared on a modified cash basis whereby non-
monetary assets are expensed when acquired and monetary assets and liabilities are
carried at fair value.
b) Currency
Transactions in foreign currency are translated into Birr at the approximate rate of
exchange prevailing at the date of the transaction, Cash balances denominated in
foreign currencies are translated into Birr at the exchange rates ruling at the balance
sheet date.
6
MINISTRY OF WATER AND ENERGY
ACCESS TO DISTRIBUTED ELECTRICITY & LIGHTING IN ETHIOPIA (ADELE)
PROJECT
IDA CREDIT NO.6857, Parts 3.1 and 5.2
NOTES TO THE FINANCIAL STATEMENTS
7 JULY 2024
3. BANK BALANCES
2023
USD Ethiopian USD Ethiopian
Birr Birr
National Bank of Ethiopia-
A/c No. 012001300004 3,703,190 215,709,633 306,422 16,741,970
National Bank of Ethiopia in 5llf7 28,756,676 18478 9.872.688
Birr A/c No. 0102001040002 42 24424 490,900 26,614,658
4. ADVANCE
2023
USD Ethiopian Birr USD Ethiopian Birr
Staff advance 10,963.60 629,563 2,365 126,575
VAT receivable 1,689.56 96,927 - -
Withholding tax 20.19 1,158
5. PAYABLES
2023
USD Ethiopian Birr
Unclaimed salary 1,447.70 83,052 -
Ethio-telecom 387.32 22,220 - -
1,835.02 _____________
6. ACCUMULATE D FUNDS
Ethiopian
USD Birr
Balance as at 7 July 2023 493,265 26,741,233
Excess of sources over uses for the
year 3,737,360 218,507,543
Unidentified difference
Ending balance 7 July 2024 4.230625
7
MINISTRY OF WATER AND ENERGY
ACCESS TO DISTRIBUTED ELECTRICITY & LIGHTING IN ETHIOPIA (ADELE)
PROJECT
IDA CREDIT NO,6857, Parts 3.1 and 5.2
NOTES TO THE FINANCIAL STATEMENTS
7 JULY 2024
7. DATE OF AUTHORIZATION
The Chief Executive Officer for Energy Sector of the Ministry of Water and Energy
authorized the issue of these financial statements on 19 December 2024.
8