On a rainy afternoon in Addis Ababa’s old Italian district, a flash and a loud bang from the top of an electricity pylon sends pedestrians running in all directions. “Lousy Indian-made transformers,” mutters one passerby, who, like many people, argues that Ethiopia has not got the best value for money from its municipal power contractors.
For decades, Ethiopia has suffered from chronic power shortages. In 1953, the Aba Samuel hydroelectric dam was the only power source in the country, generating just 6MW. That number has slowly risen to 2,300MW today, which is still far short of the amount of electricity Ethiopia needs to provide power for its 95 million people. By comparison, South Africa, the continent’s most industrialised economy, produces more than 250,000MW.
Ethiopia’s government has long touted the potential of its power sector to facilitate economic growth. It estimates a projected capacity of 60,000MW from hydroelectric, wind, solar and geothermal sources combined.
“Ethiopia has very big potential in energy sources,” says Azeb Asnake, chief executive officer of Ethiopian Electric Power, the state-run power utility. “The biggest [is] hydropower. We have 12 river basins in Ethiopia, nine of which are actually now under development,” she says, also noting the strong potential of solar and geothermal production.
The country’s ambitious plan to become a middle-income country by 2025, which is estimated to cost $200bn in investment, relies heavily on developing electricity production. The government aims to establish grid links as far north as Europe and as far south as South Africa. “From Ethiopia we [will] try to go to Kenya and through Kenya to go to Tanzania and further to South Africa. And in the north […] we are already connected with Sudan and from Sudan to Egypt and further to Europe,” says Azeb. The government plans to use the money earned from power exports to fund other projects.