In the past decade, Ethiopia has experienced strong and broad growth averaging 11 percent, more than twice the regional average of 5 percent.
The robust economic growth has earned the country the name, the Lion of Africa, with the growth being invested in railway, roads and dams aimed at boosting electricity production and improving transportation to and in its capital city of Addis Ababa.
Although severe droughts have held Ethiopia back from achieving adequate economic growth, expansion of the services and agricultural sectors account for most of the growth in the country. Other than these, Ethiopia is also placing itself strategically to become Africa’s leading electricity hub.
In the recent past, Ethiopia has been putting efforts to improve its capacity to export electricity from hydropower to other African nations including Tanzania, Rwanda, South Sudan and Yemen. Currently, Ethiopia exports its electricity to parts of Kenya, Sudan and Djibouti.
Since Ethiopia decided to export its excess electricity to other countries in 2014, the country has cashed in on the sale, with the Ethiopian Electric Service noting that it made $123 million (2.6 billion birr) between 2015 and 2016 budget year.
Meeting regional demands
Last year, as a part of a cross-border effort to meet regional energy demand and limit increases in climate-changing emissions, Ethiopia reportedly planned that by 2018, it would export renewable energy to more neighboring countries, a key step in protecting the environment from pollution.
According to then the CEO of Ethiopian Electric Utility (EEU), Gosaye Mengistie Abayneh, their vision is to interconnect the entire network on the African continent and beyond.
He said that the modern technology and the good confidence built among nations, especially in African countries will be a great opportunity for Ethiopia.
Abayneh said that Ethiopia-Djibouti Power Interconnection has a huge impact beyond interconnectivity, which is creating relations between the two nations.
He hopes that the Ethiopia-Kenya Transmission Line will enable the country to interconnect with Tanzania and beyond. Moreover, they envision interconnecting with South African Power Pool, and even reaching northern Africa through Sudan and Egypt.
For a government that is aiming to develop a middle-income country by 2025, “electricity is a major player and the driver of socio-economic development,” he said.
He also called on private investors to explore opportunities in the power sector.
According to the government, Ethiopia currently has installed electrical capacity of more than 2,200 megawatts. In its latest Growth and Transformation Plan (GTP) it says that by 2020, it aims to reach 15,000 megawatts of electrical generating capacity, including 1,500 MW from wind energy, 11,000 MW (hydropower), 1,200 MW from geothermal, 300 MW from solar and 600 MW from co-generation.
Plans are underway to ensure that more than the 50 percent that does not have access to the country’s electric grid gets power especially in the rural areas where they mainly rely on wood for fuel, consequently leading to deforestation.
In the 2015 UN-led climate talks in Paris, Negash Teklu, executive director of PHE (Population, Health, and Environment) Ethiopia, an NGO consortium, noted that increased reliable renewable energy, could translate to employment for Ethiopia’s large number of young people through small renewable energy businesses and protect the environment.
Image credit: Reuters