As the water tower of Africa, Ethiopia offers a great deal of opportunity for clean energy production which has become vital in the current global environment. As the country has the potential to export energy to the region and beyond, investing in the energy sector of Ethiopia creates a new investment opportunity with high returns.
Current potential capacity of production:
• Hydro power – more than 45,000MW
• Wind energy – more than 10,000MW
• Geothermal energy – more than 5,000MW
The sector has been open for foreign investment Since the amendment made on the investment code of the country in 2003. Currently foreign and local private investors can participate in the production of hydropower, wind, solar and thermal energy and Distribution of off-grid. Ethiopia is endowed with an immense potential of renewable energy sources such as hydro power, wind, solar energy and geothermal energy. It is the source of nine river basins which are suitable generate Electric power.
The Nile, the longest river in the world, gets about 85 per cent of its waters from the Blue Nile which originates from Ethiopia. Almost all of the country’s rivers are suitable for hydro power generation which is the main source of energy – a clean source of power generation. Non-renewable energy resources such as natural gas and coal energy also exist. The potential of the sector has created huge opportunities for the country to export electricity to neighboring countries and beyond.
Despite the abundance of potential resources Suitable for the energy sector development, the level of electricity production was about 13% (which is less than 400MW) some 20 years ago. The Government determined to turn around this reality and prepared a comprehensive strategy to increase energy production and coverage. This strategic approach is essential to spur the growth of other major sectors. The Current installed capacity of Electric power is standing at almost 4000 MW this year. Ethiopia aims to generate 10,000 MW of electricity and to build 15,000 km transmission lines during the Second Growth and Transformation Plan period (2015-2019).
Beyond satisfying its energy needs, the country is currently working to export electricity to neighbouring countries which is executed on the basis of the master plan, a 2,000km line that connects Ethiopia-Kenya-South Sudan-Rwanda is nearing completion. Ethiopia has connected its power grid with Sudan, Kenya and Djibouti and currently exporting 195 MW of electricity to the three neighbouring countries. It plans to sell additional 400 MW of electricity to Kenya next year, and a memorandum of understanding is expected to be signed to construct an electric line that connects Ethiopia-Tanzania-Burundi-Yemen and Somaliland. It also intends to export electricity to Egypt, Uganda, Somalia and South Sudan once the massive Ethiopian Grand Renaissance Dam (GERD) project is completed. The Dam is being constructed on the Nile River, with $4.3-billion dollar plant, which is expected to have a power generation capacity of 6,000 MW of electricity, will create a surplus of power to export. The major hydro power projects generating power and under construction are;
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