Ethiopian Energy^Power Business Portal,eepBp

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.

In my experience working for power projects across communities in Ethiopia, one of the key infrastructures any one can get at most support everywhere is a project meant for electricity of any form or path way. The people in the remote locations included are already well aware what electricity services entail for development of their livelihoods and they do not want to obstruct such developments often times at the expense of individual properties. However, the generation, transmission and distribution infrastructures require a significant amount of land and with a clearly long term, economic, environmental and social consequences where it pushed communities to stay at high alert to similar future developments in their locality.   

In energy and power projects, it is a common experience to witness the direct beneficiaries being located away from the physical infrastructures, while the most affected are the local communities with little to no direct benefits exposing them to undue pressure to their livelihood and lifestyle mostly forever. As the development continues, and as stipulated in the constitution, there must be a mechanism put in place not only to safeguard their livelihood but also ensure that they are part and parcel of the development process and it can be done as global practices indicated.

So far, the common practice has been to conduct environmental and social impact assessments (ESIA) studies and monitor the implementation mainly because it is a mandatory requirement by the regulator and usually the financing institutions. This has often been with significant shortfalls in addressing the needs, wants and views of communities to its core. While ESIA studies do not effectively engage the key stakeholder’s primarily the communities whose livelihood is directly affected from the very beginning, the monitoring practice too loose focus as the implementation of the projects progresses diminishing the trust of the public in the longer term. The amount of resources allocated have not been more than the required amount of meeting the mandatory requirements, for example.  

As the development of energy and power infrastructure move away from the public sector led to the private sector led development models, there comes a rigorous need to engage the communities at all levels of development stages: development, construction and all the way to operation and decommissioning stages.

Currently, there lacks a well-organized set of manuals to community engagement for energy and power projects that could easily be used as a reference by the private sector developers. Ethiopia is a large country with diverse set of geographic, demographic, social, cultural and religious backgrounds and it would be costly and time taking to develop a comprehensive guiding manual that would address every part of the communities in the country. It is, however, invaluable to come up with an average go to reference that covers the legislations, mandatory regulatory requirements, representative community context samples and the nature of energy and power infrastructures- leaving the details to the private sector developers.  

There is a lot to learn from the guide to community engagement for power projects in Kenya, a guide document developed by Power Africa that brought global best practices and local context together. The document show cases how communities in project areas in Kenya learn from other countries’ cases which passed through similar experiences and it is worthwhile to replicate it in Ethiopia too.

The International Association of Public Participation (as cited in  (Jeremy Firestone, 2018 ) ) provides a way of thinking about public participation, with processes running from those that seek to ‘inform,’ to obtain feedback ‘consult’, to reflect community concerns and aspirations ‘involve’, to engage citizens as partners ‘collaborate’, to those that seek to give the public the final decision ‘empower’.

It is time to improve the level of public participation of Ethiopian communities in energy and power project developments to the level of community engagement/collaboration and in time to empowerment if the country has to genuinely need to fast track more financial closes in a short span of time in energy and power project developments. 

Community engagement considers a full suite of communication and direct interaction with impacted communities that, ideally, leads to community consent for a project (Power Africa, 2018). The Ethiopian Constitution which is the foundation of all legislative and policy frameworks of the country specifies the concepts of sustainable development and environment rights that are entrenched in the rights of the people of Ethiopia the right to development and the right to live in a clean and healthy environment and puts the principles that designs and implementation of development programs and projects not to damage the environment and the need to conduct consultation and the expression of views in the planning and implementation of environmental policies on projects that affect them directly.

Whether the constitutional right to communities is sufficiently safeguarded in practice in Ethiopia during projects development is a million question that needs further research and scrutiny. What I do know for sure from my experience is that a lot remains to be done to improve the collaboration among the stakeholders and it is more critical and relevant as the development policy encompasses and shifts away to more of the private sector, as laid out in the home grown economic development policy publicized by the government of Ethiopia very recently.     

A literature from the International Association of Public Participation (as cited in (Jeremy Firestone, 2018) as well suggested that local citizens who perceive a decision-making process as fair may more be likely to ‘accept’ the substantive outcome even if it does not fully satisfy their concerns, and on the flip side if community members do not have a voice in the decision-making process, those who were leaning toward support could become opponents or at the very least, more likely annoyed by an operating project.

With the current wave of political, demographic, economic and business model reality changes in Ethiopia, there is no right time than today to reconsider the overall approach to energy and power infrastructure developments to gain the support and reap the benefits of engaging all the stakeholders with a particular emphasis to communities directly affected.

In my own experience working for the power utility, I witnessed that consumers are offended more by the inefficient handling process than with actual payment amounts in their electricity bills to be paid to the utility. In the face of the increasing electricity tariff since December 2018, it is imperative and fundamental for the Utilities to engage consumers at all levels to build transparency and efficiently in the tariff management, request handling processes, service delivery and the overall relationship among consumers, for example.

National Electrification Program, NEP2.0, highlights the work in progress in terms of what the Ethiopian Electric Utility does to engage citizens in the electrification efforts based on the Citizens Charter approved in 2016, yet the country needs to engage citizens and do more at a national level covering all electrification pathways and the whole energy sector strategy and set the stage for the upcoming private sector players.

Michael Porter and Mark Kramer in their article in Harvard Business Review coined a shared Value concept based on the idea that companies can increase profits and enhance competitiveness by solving societal problem arguing that they can move beyond corporate social responsibility and gain competitive advantage by including social and environmental considerations in their strategies.Treating societal challenges as business opportunities, they suggested, is the most important new dimension of corporate strategy and the most powerful path to social progress. According to them, shared value results from policies and practices that contribute to competitive advantage while strengthening the communities in which a company operates creating shared value in three ways; by reconceiving products and markets, redefining productivity in the value chain, and strengthening local clusters, and the concept is progressively gaining ground both in business schools and boardrooms (Michael E. Porter, 2011).

Companies around the world have started to incorporate shared value concept in to the core of their strategic approaches. Shared value concept puts communities at the center of their operations a step well ahead of corporate social responsibly practices benefiting themselves and communities throughout the life cycle of projects. IPP power projects which are Special purpose vehicles in nature depends on cash flows whether to take off or continue to operate in the projects’ life time. Anything perceived or real disruptions coming from communities will determine the fate of IPP projects and it is time to enhance the work we do with communities in line with the development policy in the energy and power sectors.

While developers need to build transparency in their approach of engaging the communities, the state should also be part of the game beyond monitoring implementations and setting or easing the regulatory environment to lead IPP projects to success. Any failure of IPP projects will be a huge burden for the government in the future, leading to delayed public services, in addition to the costly litigation or resolution procedures, and the overall impact or disruption to the market ecosystem.

The public private partnership business model is still in its emerging state in Ethiopia and communities can impose real constraints to its growth if the country fails to address it sufficiently and properly, engaging the communities at every step of the way. One very clear contribution the state can give to the market players could be an organized set of guiding document or manual developed for the energy and power sectors much like the manual developed by Power Africa for the Kenyan power market.   

 

The original version could be avalable for download here>>>

 

References

Jeremy Firestone, B. H. (2018). Reconsidering barriers to wind power projects: community engagement, developer transparency and place. Retrieved from Journal of Environmental Policy & Planning: https://www.tandfonline.com/doi/pdf/10.1080/1523908X.2017.1418656?needAccess=true

Michael E. Porter, M. R. (2011, January–February). Creating Shared Value. Retrieved from Harvard Business Review, HBR: https://hbr.org/2011/01/the-big-idea-creating-shared-value

Power Africa. (2018, January). Guide to Community Engagement for Power Projects in Kenya . Retrieved from USAID: https://www.usaid.gov/documents/1860/guide-community-engagement-power-projects-kenya

 

 For more related articles read 

 

Ethiopian Electric Utility Working to Broaden Opportunities for Women in the Power Sector

Assessment of Ethiopian Energy and Power Business Updates from Policy to Implementation, October 2019

Tulu Moye Geothermal Commences Drilling-the project overcame various challenges from the community


 

 

 

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