Ethiopia Uninterruptible Power Supply Procurement Project

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6 Frequently Asked Questions about “Ethiopia Uninterruptible Power Supply Procurement Project”

Does Ethiopia have a solar power contract?

Since 2018, Ethiopia held two tenders to procure 1,000MW of electricity. The first tender for two solar photovoltaic (PV) projects led to a power purchase agreement (PPA) in 2019 with Saudi Arabian company ACWA Power and one of the cheapest tariff rates in sub-Saharan Africa, at US$2.526 cents/kWh over 25 years.

Does Ethiopia have a legal framework to procure electricity from independent producers?

The legal and institutional framework to facilitate electricity procurement from independent producers has taken off from a solid foundation and resulted in several ongoing projects. Since 2018, Ethiopia held two tenders to procure 1,000MW of electricity.

Why does Ethiopia have a low electricity supply?

Despite abundant resources, Ethiopia's per capita electricity consumption of 100kWh per year is the third-largest electricity access deficit in sub-Saharan Africa. Use of electricity for socioeconomic development is low. Consequently, Ethiopia's energy supply is highly dependent on biomass resources, namely firewood and agricultural waste.

What is Ethiopia doing about electricity?

Ethiopia continues to plan and implement a series of projects, including its National Electrification Program 2.0. The Ministry of Water and Energy (MoWE) 2 provides high-level direction and policy on electricity and oversees its governance.

Does Ethiopia use electricity for socioeconomic development?

Use of electricity for socioeconomic development is low. Consequently, Ethiopia's energy supply is highly dependent on biomass resources, namely firewood and agricultural waste. However, electricity generation capacity has jumped over the past three decades, from 380MW in 1991 to 4,478MW in 2021.

Can auction-based renewable electricity procurement attract private investment?

Auction-based renewable electricity procurement has the potential to attract private investment and lower prices, but its design and implementation can be challenging. Since 2018, Ethiopia has organised auctions to procure new capacity from independent power producers (IPPs).

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