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The Economic Commission for Africa (ECA) and the RES4Africa Foundation have jointly released a series of country regulatory reviews on electricity markets in Ethiopia, Rwanda, Zambia, South Africa and Ghana.
In 2020 alone, the global energy market saw about $1.9 trillion in investments, of which emerging and developing countries attracted 1/5th. Africa captured only a fraction, signaling the crucial importance of addressing private sector investment participation challenges in the electricity market. Towards this end, addressing regulatory and policy challenges in the sector is essential.
Ethiopia’s Growth and Transformation Plan I (GTP) outlined a 15-year plan with three 5-year phases to transform Ethiopia from a developing country to a middle income country by 2025. Under GTP I (2010-2015), the goal had been to increase the installed generation capacity from 2,000 MW to 10,000 MW primarily through hydro power projects. With some of those projects still under construction, the country currently has approximately 4,500 MW of installed generation capacity.
Mr. William Lugemwa, Director of ECA’s Private Sector Development and Finance Division, stated that “the work we do on national regulatory reviews, capacity support on regulatory system development using our upcoming software (ROAR), and our work with AUC on a continental framework on regulation and private sector participation are essential in working with member States towards regulatory improvements to meet SDG7 goals.”
Ethiopia has abundant renewable energy resources and has the potential to generate over 60,000 megawatts (MW) of electric power from hydroelectric, wind, solar and geothermal sources. As a result of Ethiopia’s rapid GDP growth over the previous decade, demand for electricity has been steadily increasing. Despite Ethiopia’s energy potential, the country is experiencing energy shortages and load shedding as it struggles to serve a population of over 110 million people and meet growing electricity demand that is forecast to grow by approximately 30% per year.
