Infrastructure | Ethiopia Plans $8 Billion Investment in Clean Energy

Addis Ababa, Ethiopia, Capital Markets in Africa: Ethiopia plans to install almost 13,000 megawatts of renewable energy over five years in a bid to bring power to three out of every four citizens who currently live without electricity, a top government official said.

“Currently we have an installed capacity of about 4,200 megawatts,” said Motuma Mekassa, Ethiopia’s electricity minister, in an interview at the Africa Energy Forum in London. It will cost “at least” $8 billion to raise installed capacity to 17,000 megawatts by 2021, he said.

Africa’s second-most-populous country after Nigeria, Ethiopia has just begun to tap into its renewable-energy resources. The country is crossed by several large rivers including the Blue Nile and the Awash than can help to generate as much as 45 gigawatts of hydropower. The country is also seeking to install solar, wind and geothermal to hedge against drought.

“Sometimes we face lack of rain,” Mekassa said. “When you don’t have rain, you don’t have water in the dam and you cannot generate electricity. At this time you have to go with the solar and the wind.”

There is a 6-gigawatt hydropower dam currently under construction and other projects with 200 megawatts and 300 megawatts of capacity are being developed, Mekassa said.

The country’s clean energy industry has attracted investments of $1.5 billion from 2009 to 2014, according to Bloomberg New Energy Finance’s Climate scope study.

Capital for renewable energy is coming from the government treasury, development institutions and the private sector. The government is working on new regulations and guidelines to attract more investors to the renewables sector. Denmark’s Vestas Wind Systems A/S has an exclusivity agreement with Ethiopia’s government for 300 megawatts of wind turbines.

About 73 percent of Ethiopia’s 96 million citizens don’t have access to electricity, according to data from the World Bank.

Source: Bloomberg Business News