The 2020 edition of Tracking SDG 7: The Energy Progress Report that monitors and assesses attainments in the global quest for universal access to affordable, reliable, sustainable, and modern energy by 2030 is out. The reports says, “Although the world continues to advance toward SDG 7, its efforts fall well short of the scale required to reach the goal by 2030 with a disturbing figure of 789 million people still without access to electricity and 3 billion people without access to clean cooking fuels(2018)”.
Source: SDG7 2020 Tracking Report
A helicopter view of the report clearly shows that Ethiopia is one of the 20 countries with the largest access deficit, the share of the population having access to electricity still at 45%, and only less than 5% of the population having access to clean fuels, as of 2018.
There has never been a time electricity has indeed become essential service to our survival than today. Yes, it has been proved and called upon again and again that modern energy service in all its forms is fundamental to societies’ social, economic and environmental progress. In the face of COVID-19, it has even become more essential to our survival.
Now, we are in an urgent call to sideline policies, regulations, directives and working procedures to ensure hospitals, clinics, health centers and medical storage facilities are powered with the available energy sources. Most of the rural health centers in Ethiopia are either powered by off-grid power sources or not powered at all. That means, there is a strong chance that they receive unreliable power supply during the night or not having any power supply at all. Backup generators are key.
It is time to enhance cooperation in mobilizing available Diesel generators in government, NGO and business offices in the urban centers and where there is a relative grid access, and the government taking the responsibility of refueling, mapping locations, transporting and onsite installations. If some can forgo house rents, salaries, building facilities and homes why not generators in our backyards, doing nothing now any way.
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.
|08 May 2020;|
08:00AM - 05:00PM
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