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Ethiopia’s big bet on renewables a bright spot for Africa

Updated: Nov 20, 2022

Ethiopia’s massive investment in clean energy has already begun to reap dividends for the country, with the planned export of 200 MW of hydropower to Kenya set for November, signalling an even bigger role for its renewables in Africa’s energy transition.

Seth Onyango, bird story agency

Ethiopia’s planned 40 billion US dollar renewable energy "master plan" has taken a step forward as regional markets open up to its electricity supplies.

In the 2021/22 fiscal year, Ethiopia made about 100 million US dollars from power sales to Djibouti and Sudan, the Ethiopian Electric Power (EEP) announced a fortnight ago, with a new agreement sealed in the past week.

As new capacity comes online, EEP plans to sell more power to Kenya and build grid links to South Sudan, Rwanda, Uganda, Tanzania, and Yemen (across the Red Sea).

Ethiopia’s big bet on renewables a bright spot for Africa [Graphics: Hope Mukami]


In a Power Purchase Agreement (PPA) signed between Nairobi and Addis Ababa last week, Kenya will get a maximum firm capacity of 200 MW for the first three years and thereafter a maximum firm capacity of 400 MW for the remainder of the 25-year deal.

The agreed tariff is markedly competitive and will see Kenyans enjoy clean, reliable, and affordable power, an important ingredient in its push to ramp up manufacturing.

EEP will be the second largest power supplier to Kenya Power (the state electricity distributor) after the local KenGen Hydros Eastern Cascade, with a contracted 600MW capacity.

With its massive investments in renewable energy, Ethiopia is hoping to replicate its aviation industry’s success in the energy sector.

However, not everything is flowing smoothly. GERD, the flagship project in Ethiopia's 40 billion US dollar clean energy master plan, is mired in a trilateral feud between Ethiopia and the downstream states of Egypt and Sudan which are concerned that the mega dam will slash critical water supplies from the Nile River.


Ethiopia announced in mid-June that it had completed 88 per cent of the work on the dam, with commissioning set for the end of 2023.


But Ethiopia also has other, less controversial energy projects that could transform it into a major energy hub once completed.

Its current 71 renewable power projects include 16 hydro-power, 24 wind, 17 steam, and 14 solar projects, making the model arguably one of the world’s biggest policy shifts towards clean energy and potentially building Ethiopia into a leader in clean energy in Africa.

At the same time, Ethiopia will bolster its electricity generating capacity from the current 4,200 MW to around 35,000 MW (closer to the continent's top power producer, South Africa's current 58,095 installed capacity) by 2037.

Ethiopia already consumes less power at certain times than it produces, creating a surplus for export to its neighbours.

Ethiopia’s big bet on renewables a bright spot for Africa [Graphics: Hope Mukami]


Its energy roadmap shows that clean energy could be a safe bet for Africa, which boasts an immense renewable energy resource base.

Analysis by the International Renewable Energy Agency (IRENA) and the African Development Bank (AfDB) shows an integrated policy framework built around the energy transition could bring a wave of new sustainable energy investment to Africa, growing the continent’s economy by 6.4 per cent per annum, by 2050.

“Africa’s governments and people are too often asked to rely on unsustainable fossil fuels to power their development when renewable energy and energy efficiency solutions offer economically attractive and socially beneficial alternatives,” said Francesco La Camera, IRENA director-general.

“The transition offers a unique opportunity for Africa to meet its development imperatives. Through tailored policy packages, African countries can harness their strengths and resources to overcome long-established structural dependencies.”

But Africa will need more investments in renewables.

According to Renewable Energy World, of the US$2.8 trillion invested in renewables globally between 2000 and 2020, only 2 per cent went to Africa, despite the continent’s renewable energy potential and its need to bring modern energy to billions of citizens.

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