GET.invest

Close
Best results
See all results
Full meaning African Union Community of Sahel–Saharan States Common Market for Eastern and Southern Africa Economic Community of West African States Foreign direct investment Gross domestic product Inclining block tariff(s) International Monetary Fund Independent power producer Kilowatt Kilowatt hour Liquid petroleum gas Megawatt Pay as you go Power purchase agreement Private public partnership Standard and Poors Global Ratings Sub-Saharan Africa Transmission and distribution Time of use West African Economic and Monetary Union United Nations Industrial Development Organization Value added tax World Bank Regulatory Indicators for Sustainable Energy Projection for 2030 2017/2018 reporting year SSA average includes South Africa. Calculation for SSA average and country data: Total consumption (2016) / total population (2016). SSA average: 18% This includes diesel, kerosene and gasoline subsidies. Rates and tariffs were converted with the average exchange rate to the Euro in April 2020. Exchange rates available from ec.europa.eu Rates and tariffs were converted with the average exchange rate to the Euro in April 2020. Exchange rates available from ec.europa.eu Rates and tariffs were converted with the average exchange rate to the Euro in April 2020. Exchange rates available from ec.europa.eu

Energy Sector

Investment Overview
Despite a relatively large installed capacity of 4.3 GW, Ethiopia’s power supply has been constrained in 2019. Its extensive reliance on hydro generation and a severe drought in 2019 meant that the country faced a power shortfall of 426 MW. With the second largest population on the continent, per capita electricity consumption remains low at less than 100 kWh per year. This is despite relatively good electrification rates in rural and urban areas, exceeding 30% and 95% respectively.

As of 2020, nearly 13 million households are without electricity, accounting for about 55% of the population. The government plans to reach universal access to electricity by 2025, and peak demand is expected to grow more than threefold to 9 GW by the same year. To meet this large and growing demand, the country plans to achieve an installed capacity of 25 GW by 2030.

Renewable energy in Ethiopia is highly favourable to foreign private investment, providing a range of opportunities across technologies and value chains. While the country has limited experience with IPPs, initiatives like developing a feed-in-tariff bill are underway to attract and incentivise investment in the sector

Ethiopia signed its first set of agreements with IPPs in March 2020 for the development of two geothermal power plants, Corbetti and Tulu Moye.

Structure

The current legal and regulatory frameworks allow private foreign investors to participate in a range of energy projects, including dam construction, hydropower generation and manufacturing and distribution of biogas digesters and solar technologies.

Foreign private investment is also allowed in electricity-related manufacturing of components, equipment, appliances and systems used in generation, transmission and distribution. Investment in off-grid minigrids to electrify rural communities is also allowed for a range of solar, small-hydro or hybrid systems.

The country is in the process of drafting a feed-in-tariff bill, which should allow IPPs to sell renewable energy to the grid at specified rates. Ethiopia signed its first agreements with IPPs in March 2020, for the construction of two geothermal plants, Corbetti and Tulu Moye.
Generation:

Ethiopian Electric Power (EEP) is responsible for all generation.
Many IPPs have been signed, but none were operational as of May 2020.

Transmission:

EEP is responsible for all electricity transmission.

Distribution:

Ethiopian Electric Utility (EEU) is responsible for all electricity distribution.
The Ethiopian Electric Utility (EEU) is the entity responsible for electricity distribution. It purchases bulk power from Ethiopian Electric Power (EEP) and distributes to end customers. EEU is presided over by the Ministry of Water, Irrigation and Electricity. EEU is also the primary implementing entity of the grid extension component of the National Electrification Programme 2.0.

EEP is responsible for electricity generation and transmission (>132kV). EEP is presided over by the Ministry of Water, Irrigation and Electricity and engages with IPPs.
The Ministry of Water, Irrigation and Electricity (MoWIE) oversees development and management of water and energy resources, develops plans, policies and laws and implements and supervises other governmental agencies and entities (EEU, Ethiopian Energy Authority (EEA) and EEP). It is also involved with research and technical support to regional water and energy entities.

The Ministry of Trade is involved with providing tax incentives including tax-free importation of capital goods and tax holidays for companies importing off-grid solar technologies.
The Ethiopia Energy Authority (EEA) regulates the electricity sector, issues technical codes standards and directives, and commissions programmes and projects on energy efficiency. EEA reports to the MoWIE.
The Ethiopian Rural Energy Development and Promotion Centre (EREDPC) has the mandate to carry out national energy resources studies, data collection and analysis, rural energy policy formulation, technology research and development. It also oversees the Rural Electrification Fund (REF) and the Rural Electrification Executive Secretariat (REES).

The REF supports private sector and cooperative engagement in rural electrification activities through loan based finance and technical support.

The Development Bank of Ethiopia is serving as the financial intermediary between the REF and project developers.

The Rural Electrification Executive Secretariat (REES) selects projects for REF funding and provides advisory services, capacity building, and training to regional energy entities.

The Alternative Energy Technology Development and Promotion Directorate (AETDPD) is responsible for manufacturing, laboratory and training support for alternative energies (biomass, mini-hydro, solar, wind and others).

The Ethiopian Investment Commission (EIC) issues business and commercial licences and registrations and supports general foreign investment promotion efforts.

The Ethiopian Clean Cooking Alliance (ECCA), launched in November 2019, is an advocacy organisation for clean cooking Ethiopia with the aim to create an enabling environment for a growing market.

Key Actors

Gridfinder Map
Transmission (OSM)
Distribution (predicted)
Electrification targets
Utility/distributor
The Ethiopian Electric Utility (EEU) is the entity responsible for electricity distribution. It purchases bulk power from Ethiopian Electric Power (EEP) and distributes to end customers. EEU is presided over by the Ministry of Water, Irrigation and Electricity. EEU is also the primary implementing entity of the grid extension component of the National Electrification Programme 2.0.

EEP is responsible for electricity generation and transmission (>132kV). EEP is presided over by the Ministry of Water, Irrigation and Electricity and engages with IPPs.
Ministry (Ministries)
The Ministry of Water, Irrigation and Electricity (MoWIE) oversees development and management of water and energy resources, develops plans, policies and laws and implements and supervises other governmental agencies and entities (EEU, Ethiopian Energy Authority (EEA) and EEP). It is also involved with research and technical support to regional water and energy entities.

The Ministry of Trade is involved with providing tax incentives including tax-free importation of capital goods and tax holidays for companies importing off-grid solar technologies.
Regulator
The Ethiopia Energy Authority (EEA) regulates the electricity sector, issues technical codes standards and directives, and commissions programmes and projects on energy efficiency. EEA reports to the MoWIE.
Others
The Ethiopian Rural Energy Development and Promotion Centre (EREDPC) has the mandate to carry out national energy resources studies, data collection and analysis, rural energy policy formulation, technology research and development. It also oversees the Rural Electrification Fund (REF) and the Rural Electrification Executive Secretariat (REES).

The REF supports private sector and cooperative engagement in rural electrification activities through loan based finance and technical support.

The Development Bank of Ethiopia is serving as the financial intermediary between the REF and project developers.

The Rural Electrification Executive Secretariat (REES) selects projects for REF funding and provides advisory services, capacity building, and training to regional energy entities.

The Alternative Energy Technology Development and Promotion Directorate (AETDPD) is responsible for manufacturing, laboratory and training support for alternative energies (biomass, mini-hydro, solar, wind and others).

The Ethiopian Investment Commission (EIC) issues business and commercial licences and registrations and supports general foreign investment promotion efforts.

The Ethiopian Clean Cooking Alliance (ECCA), launched in November 2019, is an advocacy organisation for clean cooking Ethiopia with the aim to create an enabling environment for a growing market.

Tariffs

Tariff components
Low voltage
Consumption Charge (€/ kWh):
€0.03

No indication of tariff rise as per schedule end of 2019. 2018 tariffs reported
Demand Charge (€/kVA) (No period provided. Assuming monthly):
Industry: €0.41

No indication of tariff rise as per schedule end of 2019. 2018 tariffs reported
Service charge (No period provided. Assuming monthly):
Residential prepaid (average across IBT categories): €0.12
Residential postpaid (average across IBT categories): €0.73
Other prepaid: €0.53
Other postpaid: €1.52
Industry: €1.52

No indication of tariff rise as per schedule end of 2019. 2018 tariffs reported
Medium voltage
Consumption Charge (/ kWh):
€0.02

No indication of tariff rise as per schedule end of 2019. 2018 tariffs reported
Demand Charge (€/kVA) (No period provided. Assuming monthly):
Industry: €1.04

No indication of tariff rise as per schedule end of 2019. 2018 tariffs reported
Service Charge (No period provided. Assuming monthly):
Industry three phase: €1.52

No indication of tariff rise as per schedule end of 2019. 2018 tariffs reported
High voltage
Consumption Charge (/ kWh):
€0.02

No indication of tariff rise as per schedule end of 2019. 2018 tariffs reported
Demand Charge (€/kVA) (No period provided. Assuming monthly):
Industry: €0.62

No indication of tariff rise as per schedule end of 2019. 2018 tariffs reported
Service Charge (No period provided. Assuming monthly):
Industry three phase: €1.52

No indication of tariff rise as per schedule end of 2019. 2018 tariffs reported
Average retail tariff by consumption category
Low voltage (€c/ kWh)
Average LV
2.6
Residential (average of IBTs)
2.2
Industry
2.3
Street Lighting
2.9
Other LV
2.9
Notes
No indication of tariff rise as per schedule end of 2019. 2018 tariffs reported
Medium voltage (€c/ kWh)
Average MV
1.7
Industry
1.7
Note
No indication of tariff rise as per schedule end of 2019. 2018 tariffs reported
High voltage (€c/ kWh)
Average HV
1.5
Industry
1.5
Note
No indication of tariff rise as per schedule end of 2019. 2018 tariffs reported
Is the retail electricity tariff subject to periodic review?
Yes
Ethiopia adjusts tariffs annually in December. The Energy Regulation Article 31, sub Article 7, prescribes that major tariff reviews take place once every 4 years according to a multi-year tariff-setting regime. Requests to amend the tariff can be made to the EEA according a prescriptive process.

Quality standards

The Ethiopian Standards Agency (ESA) regulates the quality of a variety of sectors and products, including solar home systems (SHS). ESA was also reported to be working with the Ethiopia Energy Authority (EEA) on developing technical standards for minigrids. No announcements have been made yet with regards to the publishing of these standards. Draft transmission and distribution grid codes have been published and are available on the EEA website. Relevant examples of implemented standards include CES 140:2015 (Off-grid solar PV lighting kits - requirements) and ES 6085:2019 (Clean Cookstoves and Clean Cooking Solutions, Performance Requirements and Test Methods). The Ethiopia Conformity Assessment Enterprise (ECAE) ensures compliance to standards developed by ESA through testing.

Explore the data

Electrification rates
% National electrification rate
2018
% Rural electrification rate
2018
% Urban electrification rate
2018
Total installed capacity (MW)
2030
25,182.70
2018
4,263.07
Peak demand (MW)
2025
9000
2018
2491
Electricity consumption by sector (MWh), 2017
Commercial & Public Services
2128.29
Residential
3930.94
Industrial
3407.59
Per capita electricity consumption (kWh/person)
2016
87.47
SSA average (2016)
365.6
Solar PV resource potential (output range, kWh/ kWp)
3.6 - 5.2
Wind resource potential (Wind speed range, metre per second)
2.5 - 9.5
Resource Potential (small hydro) MW
1215.4
Electricity mix by source (% of installed capacity), 2018
Small Hydro (2.78 %)
Biomass (0.59 %)
Geothermal (0.17 %)
Wind (7.60 %)
Other (88.86 %)
Diesel price per litre (EUR)
T&D technical losses (% of generation)
2018
23.00%
Electricity and petroleum product subsidies (% of GDP)
Electricity subsidies, 2017
0.90%
€643,181,100.00
Petroleum product subsidies, 2017
0.98%
€651,991,800.00
Methodologies
Get to know how this Country Brief was developed
Read more
Contact
Questions or feedback are always welcome
info@get-invest.eu