Note: the 2nd round of the tariff adjustment is in force since December of 2019
The Ethiopian Electric Utility made an adjustment to the Electricity/energy tariff applicable since the beginning of December 2018. The Electricity/energy tariff is one of the key factors that determine the investment decision of private players in the power sector of countries. After such a long delay, the utility has finally made a decision and increased the tariff as indicated in the tables below.
Apart from the increase of the rate, there is also a clear distinction between the old and the new tariff calculations in the residential category. Historically, the tariff used to be non-flat or an increasing rate. The new tariff is set in a block or flat range and will have major cost implication for the consumers. In the new tariff of the residential category, the energy in KWH is multiplied with the tariff block where the monthly energy figure rests.
The Energizing Finance series is an in-depth primary research and analysis by Sustainable Energy for All (SEforALL) and partners that examines supply and demand for finance across two key areas of energy access: Electricity and Clean Cooking.
This year's publication: Energizing Finance: Missing the Mark 2020 is just released and the report found out that financial disbursement to energy access continues to significantly lag behind commitments.
1956 required investment Vs 137 tracked investment
191 required investment Vs 0.9 tracked investment
Ethiopia attracted only USD 0.9 million in 2018 in contrast to the USD 191 million it needs annually to provide its entire population with access to clean cooking solutions
Ethiopia registered only 0.1 while Ghana achieved a USD 4.7 annually,
My Take Away
While the access deficit is huge, the financing for energy access both for electricity and clean cooking is meager. Further reform of the energy sector, enhanced financial commitment and faster execution of programs and projects is critical to realize the stated goals of reaching every Ethiopian household by 2025.
A tailored policy support in tandem with the burgeoning digital transformation strategy, new business models can help address the energy access needs of millions of households in the country while creating the needed jobs to the growing youth population. Ethiopia has become one of the few last frontiers in access to energy challenge, and there are whole lot of opportunities and solutions tested anywhere else that can be applied in Ethiopia. It just needs open mind and convenient business environment.
(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.
The full-scale impact of the conflict in Tigray is yet to be uncovered. However, it gets concerning for every sensible individual as time goes by. My only hope is that we all reach out to those at risk of starvation and health related emergencies to control and minimize the humanitarian damage.
Among others, this conflict clearly exposes the often lightly-discussed topic: Energy Security not just in Tigray but throughout the country more so in the urban centers. Leaving who takes responsibility to history, I cannot imagine staying in the dark for a quarter of a year after being fully dependent on grid power for almost every livelihood activity. During this testing time in Tigray, in most instances, no power directly translates to no water, no cooking, no grinding mills, no communication, no medication, no public services and many other basic needs. Worse, probably no kerosene or diesel fuel alternatives either due to the transport access limitation. Apparently, no basic light in towns even the dirty one throughout until the utility restored the grid supply. As I write this note, Humera and Welkait areas remain in the dark, and the utility just announced restoring the grid supply to Axum, Shire and the neighboring towns well behind Mekele areas.
As someone who has been working in the transmission, distribution and substation infrastructures, I am equally concerned to the safety and hardship the utility personnels and men in uniform have to go through to bring the badly needed power supply in such a dramatic speed.
After being resistive for energy security calls, Ethiopia realized the vulnerability of its hydro dependent grid when faced with climate induced droughts (happening every now and then), and there has been a relative policy changes to diversify the energy mix through complementary investments of geothermal, wind and solar resources. Yet, the current situation in Tigray is another indicator that the energy security is still at stake and it is in the country's best interest to reform the energy sector further; Putting decentralized/distributed energy solutions at the core.