Sunday, 9 September 2018

PUBLIC PRIVATE PARTNERSHIPS AND POWER PURCHASE AGREEMENTS IN ETHIOPIA AND THE ROLE OF LEADERSHIP

(A high Level PPP Development Assessment Outcome)
Public private partnerships have become new normal in today’s business landscape across many countries. If properly managed, governments could benefit in mobilizing financial resources, technical knowhow, innovation and efficiency gains from the private sector in the delivery of public goods and services by effectively partnering with them.
Since 2017, Ethiopia has publicly announced that it would leverage PPPs as one of its strategic tools in its development agenda. The accompanying thesis make an assessment of the theoretical and historical developments of PPPs in general and its stage of development and application in the Ethiopian context. 
In the assessment, it is learned that the government of Ethiopia has committed resources by formulating a PPP policy, enacting a separate PPP law (Proclamation no 1076/2018) and outlining the institutional roles and responsibilities albeit an early development stages demanding further clarity and maturity.

Sunday, 2 September 2018

Ethiopia Inaugurated the First Waste to Energy Conversion Power Plant

The Waste to energy conversion facility has 25 MW capacity and will produce 185 Giga Watts Hour (GWh) of electricity per year, crushing 1,400 tons of solid waste on a daily basis (thereporterethiopia, 2018). The facility's successful inauguration has multiple implications and benefits to the country.
The straight forward benefit of the power plant is the additional capacity built at the heart of the main load center pushing the renewable energy resources portfolio reserve of the country in multiple directions. 
The second benefit is that Ethiopia largely depends on hydro power to drive the burgeoning economy and its energy security is often times perceived as at stake in times of drier weather.  Slowly but surely, the energy supply mix or diversity is shifting, Repi being the latest addition to Ethiopian Electric Power's, EEP's,  power capacity to safeguard the economy in such unfavorable circumstances. 

Thursday, 2 August 2018

Power Interruptions Outrage Businesses, Residents

The government of Ethiopia has invested 162 million dollars to address Addis Abeba’s unreliable power supply. Ethiopia Electric Utility, is taking measures to meet the ever growing electricity demand of 3.6 million or so city residents. Despite resolutions made by the government, the capital is experiencing increased blackouts, and the citizens are expressing their grievances about the recurrent power outages, 
Yared Dinku, 31, provides photocopying, typing, printing and internet services at his stationery shop on Mauritius Street near Gofa Mazoria. His business is entirely dependent on electricity.

Sunday, 25 March 2018

THE HIDDEN EVIL POWER OF POWER THEFT

Access to affordable energy supply is a real booster in today’s competitive business landscape so to say in the developing world where businesses scramble to better position themselves against the competitors somewhere else. The cost of electricity is one of the major factors in investment decisions in the manufacturing sector. Then, comes the question of reliability of the electricity supply. Utilities, particularly those in the developing world, are constantly challenged in balancing affordability and/against reliability. In their ongoing struggle to address both cases, power theft constantly stands on their way.

Saturday, 10 February 2018

Ethiopian Geothermal Is Private Equity’s Next $4-Billion Bet

U.S. private equity and hedge funds are backing an effort by Ethiopia to turn itself into an exporter of electricity to the region, channeling at least $4 billion into geothermal projects across the nation.G
The Ethiopian government has signed 25-year power purchase agreements with Reykjavik Geothermal Ltd., a developer led by Michael Philipp, the former head of Europe, Middle East and Africa for Credit Suisse Group AG. The company is backed by by billionaire hedge fund manager Paul Tudor Jones and Ambata Capital Partners, an investment firm run by Philipp.
Seleshi Bekele, the electricity and water minister, is seeking to quadruple Ethiopia’s power generation by 2020 and expand power sales abroad that now bring in about $90 million a year. The government also is seeking to bring power to all households by 2025, up from about 30 percent currently.
“We’re focusing on generating from renewable sources,” Bekele said in an interview in London. “We want to be carbon neutral,” he said, adding that he’d like emissions to remain at or below 2010 levels by 2030.
Ethiopia currently gets more than 90 percent of its electricity from hydro-electric plants, benefiting from powerful rivers such as the Nile. It is now at the beginning of building out other forms of renewable energy, especially geothermal wells that tap the natural heat from underground rock structures in a rift valley that passes through the nation.
Growing Demand
“The demand is growing very rapidly -- 25 to 30 percent every year, so we are trying to satisfy this demand,” said Azeb Asnake, chief executive officer of Ethiopian Electric Power Corp. “We also have a lot of industrial parks coming up -- agriculture industry and the like -- with more than 12 under construction or under operation. We really need to provide power to all this demand.”
It’s not the first time Ethiopia set out ambitious plans for power generation. In 2014, Ethiopian officials told the the Financial Times they wanted 11 gigawatts of capacity within three years. Capacity today is about 4.3 gigawatts, almost double the previous figure. Bekele is now targeting 17 gigawatts by 2020.
Geothermal draws heat from underground and uses it to drive a power turbine. The technology is lauded as one of the only sources of energy that is both baseload and renewable, since geothermal wells flow constantly, unlike wind and solar power.
“Ethiopia has some of the best geothermal reserves in the world, certainly top 10, maybe top five,” Michael Philipp, chairman of Reykjavik Geothermal, said by phone. “Geothermal is a very underdeveloped sector, only about 1 percent of the world’s reserves have been developed, so there’s significant upside to getting that right.”
Investment Flowing
Reykjavik Geothermal is an Icelandic company that’s working on two projects in Ethiopia, Corbetti and Tulu Moye. Each is expected to cost about $2 billion. They will have capacities of 520 megawatts apiece, which together is about the same as a nuclear reactor working at full tilt, and will be located 250 kilometers (155 miles) south of the capital city of Addis Ababa.
Backers of Reykjavik Geothermal won’t finance the projects alone. Philipp has raised $150 million by bringing in French energy and infrastructure investor Meridiam SAS, InfraCo Africa in the U.K., Icelandic Drilling Co. and African Renewable Energy Fund, which is part of the African Development Bank. He’s seeking an additional $450 million and said he has received interest from pension funds, private equity firms, insurers and infrastructure funds
He’s also looking to raise $1 billion of debt from development banks, such as the European Investment Bank and the Overseas Private Investment Corp.’s Power Africa program and about $500 million from export credit agencies. Philipp expects to reach financial close in 18 to 24 months.
The projects are due to be working within seven years, with the first 50 megawatts online in two to three years
Reykjavik Geothermal is also at early stages on a third project in Ethiopia
Ethiopia is seeking investors for all the projects and will hold competitive tenders for renewables such as solar this year
Support sought from World Bank’s International Finance Corp.’s Scaling Solar project, which helped fund the technology in Zambia, Senegal and Madagascar.

Shining a light on UK-Ethiopia solar energy co-operation

Ethiopian government delegation visits UK to exchange best practice with British experts in renewable energy and increase energy sector investment.
His Excellency Seleshi Bekele, Minister for Water, Irrigation and Electricity and Engineer Azeb Asnake, CEO of Ethiopian Electric Power made their first joint work visit to the UK from 31 January to 2 February.
The UK government’s Department for International Trade organized the visit which highlighted UK expertise in renewable energy, and allowed the minister to meet important companies and stakeholders in this sector.
During the visit, Minister Seleshi signed a memorandum of understanding (MoU) with British firm, Winch Energy, to develop a project to supply off-grid solar energy to 700 villages in rural Ethiopia.
During the visit, H.E. Minister Seleshi and Engineer Azeb accompanied by Ambassador Hailemichael Abera, Ethiopian Ambassador to the UK, met with Mr Jeremy Lefroy MP, the UK Prime Minister’s Trade Envoy for Ethiopia. They also met other UK government officials and British companies in the renewable energy sector. In their meetings they discussed areas where the UK and Ethiopia can deepen their energy sector investment relationship.
Minister Seleshi and Engineer Azeb also attended a roundtable chaired by the Trade Envoy and hosted by British renewable energy company Globeleq.
At the roundtable a number of UK companies presented their areas of expertise, whilst Minister Seleshi also shared Ethiopian experience on the energy sector including the plan to generate 17,000MW of power by 2020. The MoU with Winch Energy comes following the Ethiopian government’s call for international power developers to help achieve this target.
Following the meeting, Mr Lefroy commented:
I have been delighted to welcome the minister and CEO to the UK this week.
The government of Ethiopia has ambitious plans to grow its generation capacity and increase electrification so that the poorest can access energy.
The UK is already supporting these initiatives through projects such as Corbetti Geothermal, which has significant development and private finance from the UK, and I hope this visit will encourage more British investment into Ethiopia’s energy sector.
Commenting on the visit Minister Seleshi said:
Renewable Energy is at the heart of Ethiopia’s plans to reach middle income status by 2025. Creating millions of new on and off grid connections will ensure better lives for all Ethiopians: improving health and education outcomes and supporting the creation of new businesses and jobs.
Productive and sustainable use of Ethiopia’s abundance of clean energy will also allow us to share energy with our neighbours, creating revenue for Ethiopia but also helping bring light and power to millions of people in East Africa. British companies are key partners for us.
Engineer Azeb on her part also said:
It has been very good to see the level of interest from British companies and developers in Ethiopia’s energy sector.
There are many challenges to universal access in Ethiopia, but we hope that recent reforms to the market, including new PPP provisions and incentives for innovative renewable energy companies will help us develop a world class grid that is 100% clean, reliable and allows millions more people to access power.
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