This research proposal was written at the begining of 2019 with the intention of serving the Capstone Project of Open Africa Power, OAP, 2019 Initiative. We republished it here as we believe that the electricfication program financing still needs more research coverage and with a hope that reseachers will pick the idea and move it further in a way that would add value to the indutry.
There are compelling reasons for Ethiopia to reform its electricity sector sooner than later including for social, economic and environmental imperatives. Accelerating the rate of access to electricity, adding more capacity from diversified electricity supply sources and spearheading the path towards sector liberalization are the recent developments that the country aspires to achieve to enable and sustain its development agenda.
Ethiopia remains one of the primary examples of having the lowest level of electricity access coverage (44% as of March 2019) and per capita energy consumption (<100kwh) in the world although it has made commendable progress in all dimensions over the years with a public sector lead investment reaching its limit midway to the access goals of the country. Consequently, new models of project financing such as PPPs, IPPs and end user financing options that engage the private sector are becoming eminent albeit a low base demanding further clarity and maturity.
To add knowledge to the existing industry perspectives and establish a clearer understanding of the trends in the project financing schemes, this research proposal wishes to make a comprehensive screening of the available financing sources, instruments and business models; assess the viability of financial restructuring of projects to enhance project bankability; and identify the real and perceived financing barriers and risks specific to the country’s context that deter investment in the electricity sector.
Driven by the ongoing economic and the energy sector reforms, the Ethiopian energy and power sectors have become attractive to private sector investment. Generation side independent power producers including geothermal and utility scale solar projects are being introduced, currently just passing the stage of a financial close, with lots of expectation to follow by other forms of generation technologies such as in hydro and wind. There are also a few PPP based examples in the transmission side albeit at an early stage.
Historically, the energy and power sector infrastructure development in Ethiopia has been dominated by public sector investment where the responsibility of communities and key stakeholders rested on the shoulders of the government. The private sector has been engaged mainly in consulting and contracting scope of works with minimum direct responsibility of engaging the wider community.
At the same time, until very recently, the communities buy in to the government’s aspiration of building infrastructure for a larger public good as opposed to the individual and communal loses they incur whether loss of their land, environmental safety concerns, disruption of their social constructs and etc. and despite incomparably lower (as compared to current market prices) compensations in place, the broken promises and the slow bureaucratic procedures they often faced. It is no more the same.
This year, the world celebrates the 8th of March 2020 with a renewed momentum building up everywhere for providing modern energy access to the unserved, disproportionately the rural women.
International Women’s Day is a time to reflect on progress made, to call for change and to celebrate acts of courage and determination by ordinary women, who have played an extraordinary role in the history of their countries and communities, (UN).
eepBp recognizes and shouts out for the wonderful women out there selflessly sacrificing their time, knowledge and energy in advancing the interests of more women in terms of providing access to modern energy for the betterment of the overall society up to now and in to the future.
In eepBp, it is also our hope that tomorrow would be better off with the work we do today as a society in reaching out to more women and people with more modern and cleaner energy sources at a scale and faster.
This year, Ethiopia celebrates the 8th of March 2020 with a significant progress in expanding the access to modern energy and reforming to new business models, yet still with an overall electricity access coverage of not more than 44% (March 2019), and with 90% of households dependent on Solid biomass fuels (fuelwood, charcoal, animal dung, and crop residues) as the main sources of cooking(SNV Ethiopia, 2018).
eepBp belives we all can contribute in lighting up more houses, cooking healthier, studying conveniently, keeping our hygiene better, working more productively by employing more cleaner energy and calls every one especially women champions to reflect on the progress made and act more so that we live no one behind in 2020 and thereafter.
Ethiopian Electric Utility Working to Broaden Opportunities for Women in the Power Sector
Ethiopian Women in Energy Network Relaunching Program Took Place in Addis Ababa, Ethiopia Today
(A high Level PPP Development Assessment Outcome)
Public private partnerships have become new normal in today’s business landscape across many countries. If properly managed, governments could benefit in mobilizing financial resources, technical knowhow, innovation and efficiency gains from the private sector in the delivery of public goods and services by effectively partnering with them.
Since 2017, Ethiopia has publicly announced that it would leverage PPPs as one of its strategic tools in its development agenda. The accompanying thesis make an assessment of the theoretical and historical developments of PPPs in general and its stage of development and application in the Ethiopian context.
In the assessment, it is learned that the government of Ethiopia has committed resources by formulating a PPP policy, enacting a separate PPP law (Proclamation no 1076/2018) and outlining the institutional roles and responsibilities albeit an early development stages demanding further clarity and maturity.