Project description
Ethiopia has the second- largest population in Africa (>105 million, ~8.5 % of Africa population), with an expected growth rate of 2.3% per year. Such increase in population size will result in an increase in the number of individuals requiring access to electricity. The government of Ethiopia has set clear power generation and connection targets and sees the private sector as pivotal in meeting intended targets.
Policy and strategy
- National policy sees Ethiopia as a power supply hub for the East African region through the East African Power Pool
- Investment in on-grid power generation is open to the private sector, mainly targeting foreign direct investment
- Off-grid and mini-grid systems are also a major component of the nation’s plan to increase access to electricity; and engaging the private sector has been championed
- With a dedicated regulator (the Ethiopian Energy Authority) in place, the Ethiopian power sector is semi-unbundled
- The Ethiopian Electric Power (EEP) owns all pubic power generation plants and is a monopoly power transmission provider; EEP also conducts all power purchase contracts with Independent Power Producers
The Ethiopian Electric Utility is a national monopoly power distribution service provider
Key reasons for investing
- Rapidly growing electricity demand at 30-35% annually mainly as a result of;
- Growing population forecasted to reach 120 million by 2020;
- A bold industrialization agenda driving power demand; 13+ industrial parks requiring more than 1700 MW of electricity to operate;
- Over 4,500 KM of electric powered national railway to cover around 4,744 km imposing large electricity demand; and
- Plans of exporting power to Kenya, Tanzania, Sudan and Djibouti as part of the East African Power Pool
- More than 80 GW of exploitable renewable energy reserves;
- 45 GW of Hydro power exploitable energy reserves of which more than 80% is unexploited;
- 7 GW of Geothermal exploitable energy reserves of which more than 86% is unexploited; and
- An average of 5.5 kwh/m2/day of Solar energy capability of which more than 98% is unexploited
- Low electricity access provides opportunity for off-grid solutions to thrive because;
- Over 95% of rural areas are without electricity; and
- Over 14.3 million households are without the access to power.
- Trainable workforce with competitive wages
