When it comes to energy, Ethiopia has tremendous advantages. It has the second-highest installed available capacity for electricity generation in Sub-Saharan Africa, at 4.5 GW. It has a well-developed transmission and distribution network, with nearly 80 percent of the population living within proximity of medium-voltage transmission lines. It has abundant sources of renewable energy just waiting to be tapped – including wind, solar and geothermal– enough to easily supply the power needs of the country. And it is one of the few countries in the world where the electric grid is nearly 100 percent supplied by renewable sources.
These advantages, however, stand in contrast to the realities on the ground. About 70 percent of the population in Ethiopia live without electricity. The lack of power also impacts basic services – only 24 percent of primary schools and 30 percent of health clinics have access to electricity.
This discrepancy – between abundant resources and unmet needs – points to the need for a radical new approach.
With the World Bank’s support, in November 2017, the Government of Ethiopia launched the National Electrification Program (NEP), a comprehensive plan to reach universal access to electricity by 2025. To achieve this, the NEP takes a coordinated approach combining both grid and off-grid solutions, with a focus on last-mile service delivery to consumers.
By 2025, the plan is for 65 percent of the population to have electricity through the grid, and the other 35 percent through off-grid technologies - stand-alone solar systems and mini-grids. Another priority will be providing reliable electricity to schools and health centers. A state-of-the-art geographic information system (GIS) will be used to optimize the planning for both the grid- and off-grid infrastructure, and act as a monitoring and evaluation platform for the program.
To strengthen the capacity of the utility, the government is also putting in place system-wide institutional reforms, including actions to promote gender equity - child care services and increased number of women in managerial positions. To improve citizen engagement, the government will run information campaigns on the use of electricity services.
Providing modern energy services for over 10 million households within 7 years will not be an easy task. The financing required for the first five years of implementation of the NEP alone is estimated at $1.5 billion.
The World Bank is supporting Ethiopia’s efforts through the Ethiopia Electrification Program (ELEAP), a $375 million International Development Association (IDA) credit approved by the World Bank Board on March 1, 2018. This will directly finance new electricity connections for over one million households and strengthen the planning and implementation capacity of the utility, and the policy and regulatory capacity of the Ministry. ELEAP will nearly double the rate of electrification in Ethiopia, reaching over 50 percent of the population during the program period.