Apart from regulation, currency and land right issues are two of the biggest concerns for private investors in infrastructure developments in Ethiopia and so much so in Africa.
In Ethiopia for example, there are projects initiated to be developed on a public private partnership, PPP, business model where the private sector will finance, build and operate for a concession period of 20 to 25 years. The recent Scaling Solar tenders could be good examples. Independent Power Producers, IPPs, will generate energy and sell to the public entity with a pre-agreed sales agreement usually called Power Purchase agreement, PPA, for the energy and power sector. The tenders put a requirement for Special purpose Vehicle, SPV, projects to have a local content in the form of shares and using local resources in order to win the projects.
The Ministry of Water, Irrigation and Energy, #MoWIE, of Ethiopia hosted a Week of Water and Energy, #EWEW, with a theme of ‘ Transforming of the Water and Energy Sectors for Ethiopia’s New Horizon of Hope ‘ in Skylight hotel, Addis Ababa, Ethiopia. The program was officially opened on 7 June 2019 by her Excellency Ambassador Sahlework Zewde, the President of the Federal Democratic Republic of Ethiopia and it will continue up to 20 June 2019 covering different thematic areas.
Photo Credit: Tigabu
Open Africa Power 2019- Forging a New Generation of Clean Energy Leaders for Africa
The second round of the African module of the Open Africa Power, the educational program of Enel foundation, took place from 28 January _ 1st of February, 2019 in Addis Ababa, Ethiopia, involving 60 passionate, high profile, young and deeply engaged practitioners from the energy, power and sustainable development sectors selected across the continent with an aim of creating the African energy leaders of tomorrow who would make a difference in the continent’s clean energy future and beyond.
The program inspired the participants raising the expectation out of them given the existing challenges and opportunities of the energy sector across the continent and elsewhere and it was indeed a success by all measures. Thanks to the organizers.
Ethiopian Electric Utility announced a revised electricity tariff enforceable since December 2018 scraping the old one. “The electricity revision was made based on the outcome of a study that hints the need to rehabilitate the electricity infrastructure, boost rural electric access coverage and improve service delivery supported by technology and taking in to account the current electricity price hike on regional and global levels as the utility could not be able to meet the societies’ energy demand with the current tariff it charges to consumers’’, reads the utility’s statement.
The utility made the tariff change at an increasing rate to all categories except for the lower energy consumers (<=50kwh) who are allowed to continue paying with the old tariff scale. As per the utility,” the consumers are expected to cover 25 percent of the cost of energy production (equivalent to the cost of energy production 12 years ago), the government covering 75 percent of the cost of the current energy production”. From the tariff scheme announced, however, one could note that the tariff is set at a block rate (flat) depending on the energy consumption levels. It is clearly visible that higher energy consumers are charged higher rates (against the fair tariff setting principles) that seems to cross subsidize the lower energy consumers.