The World Bank approved a $500 million International Development Association (IDA)* credit to support Ethiopia’s goal of achieving universal electricity access by 2025.
Over the past decade, the Government of Ethiopia has made encouraging progress on its electrification program and expanded the grid network coverage to nearly 60 percent of towns and villages. Despite this progress, Ethiopia has the third largest energy access deficit in Sub-Saharan Africa with more than half the population still without access to reliable electricity especially in deep-rural areas which are dependent on biomass and kerosene. The electricity deficit in Ethiopia continues to exacerbate the poverty situation, preventing far too many people from fulfilling their basic socio-economic needs and limiting access to opportunity.
The Access to Distributed Electricity and Lighting in Ethiopia (ADELE) Project is an important component of Ethiopia’s National Electrification Program (NEP), which aims to strategically change direction from infrastructure development to the delivery of adequate, reliable and affordable electricity services with a vision to reach universal electrification by 2025. ADELE will focus on access to new and improved electricity services for households, smallholder farmers, commercial and industrial users, and social institutions in urban, peri-urban, rural, and deep-rural areas. The first phase of the NEP was supported by the World Bank-financed Ethiopia Electrification Program (ELEAP) approved in 2018.
As part of Energising the Green Economic Recovery response, EnDev focused on a set of instruments on the demand side, the supply side as well as the framework conditions. The targeted COVID-19 related interventions will be deployed both in the existing and fast track countries where the program encompases. Ethiopia is one of the countries included in the fast track category.
COVID-ASSIST- with the Development Bank of Ethiopia (DBE) Through a grant agreement with the DBE, EnDev will be able to provide grants to some 60 companies selling improved cookstoves (ICS) and solar equipment (PV). These bridging grants, amounting to EUR 5,000-25,000 per applicant, are given to companies to help with cash flow issues and to cover operating costs. Companies participate in a competitive process with certain eligibility criteria. In addition to the monetary support, the companies selected also receive business development support on topics like scenario planning, risk management, etc.
COVID-VOUCH - for market stimulation With a subsidy voucher scheme for eligible poor and vulnerable households, EnDev aimed at stimulating demand. Beneficiaries were identified in collaboration with the Ethiopian Government ‘Safety Net Program’; for the dissemination of vouchers, EnDev partnered with four Microfinance Institutions (MFIs). The MFIs sold the product coupons at a subsidized price to the eligible households. With these coupons the households could then buy products from ICS/solar suppliers. The suppliers in turn, cashed the coupon at one of the MFIs for the full price.
Ethiopia remains steadfast in its course to diversify the energy mix and utilize all energy sources to attain economic development objectives, according to Ministry of Finance.
The country plans to increase total energy generation by 17,000 until 2030 by diversifying the abundant sources of energy. Despite the different exploitable energy sources, Ethiopia has been solely engaged on hydropower generation, which couldn’t meet the growing development demands, the statement indicated.
After the reform, the government is encouraging the engagement of the private sector in the energy sector, especially in the form of Public Private Partnership (PPP) projects, it stated. Dozens of Public Private Partnership (PPP) projects have been engaged in developing variety of projects across Ethiopia, it was learned.
Currently, there are twenty-three large PPP projects that have sites identified, feasibility studies done and ready for procurement processing, it said. These include eight solar photovoltaic, five hydroelectric projects, five wind, three roads, one housing, and one petroleum depot which have been approved by the PPP Board.
According to the Ministry, Ethiopia has huge solar energy potential due to its geographical location near the equator. The eight PPP solar energy projects are anticipated to generate 798 MW of electricity.