The PSDP implementation requires financing of varying degrees. Looking at the investment breakdown of the program it can be seen that the largest single sum is one that is required for the generation subprogram, followed by transmission, distribution and rural electrification. Since the financial requirement of the sector is of immense magnitude a single source could not possibly raise the full financing requirement. This being the reason various international donors are expected to be mobilised to fill the gap over and above what could be locally raised in order the government be able to meet the service demanded by the growing economy and electrify the urban and rural areas of the country.

The PSDP with a total cost of Birr 8,271 million (USD 993 million) including for ongoing projects is expected to be parallel financed by the World Bank, European Investment Bank, Nordic Development Bank, Agency Franciase De Development, Austria Development Agency and Arab Bank. Total external financing amounts to Birr 2,857 million out of which Birr 900 million is secured and Birr 1,957 million is not yet secured. The Government, EEPCo and electricity users are expected to contribute Birr 5,122 million.