Ethiopia Renewable Energy
Rapid GDP growth over the previous decade until 2019, increased demand for electricity in Ethiopia. Despite its energy potential, the country is experiencing energy shortages as it struggles to serve a population of over 110 million. Electricity demand is forecasted to grow by approximately 30% per year.
Ethiopia currently has approximately 4,500 MW of installed generation capacity. Ethiopia Electric Power (EEP), the state-owned power generation agency, is charged with maintaining more than fourteen hydropower and three wind power plants located in different parts of the country. The Government of Ethiopia (GOE) has focused on the construction and expansion of power generating projects to deliver reliable electricity.
Approximately 90% of the installed generation capacity is from hydropower while the remaining 8% and 2% is from wind and thermal sources, respectively. The hydro dominated systems have been severely affected by drought, and the GOE is now ready to diversify the generation mix with other sources such as solar, wind and geothermal that will result in a more climate-resilient power system.
The Ministry of Finance has floated six solar projects for potential bidders. Out of these projects, ACWA Power, a Saudi firm has signed two power purchase agreements with EEP to develop 125 MW /each solar power. The implementation agreement for this project is not finalized yet. The GOE wishes to address power challenges of the rural community through providing off –grid solar solutions. The first round of tender is expected to float in the first two quarters of 2022.
The best prospects for U.S. exporters are solar, wind, transmission, substation and off grid technology. Competitive international tenders will be announced. Challenges related to lack of expertise and capacity on the new projects is creating a delay to conclude projects. Bureaucracy is also highly affecting project timelines.
For more information contact Commercial Specialist Yemesrach Kassu at Yemesrach.Kassu@trade.gov.