Developing the mini-grid sector in Ethiopia

On 22 October 2019, Dr. Frehiwot Woldehanna, State Minister of Water, Irrigation and Energy of Ethiopia, and Robi Redda, Director of SouthSouthNorth, signed a Memorandum of Understanding (MOU) for the continued implementation of the German Government’s International Climate Initiative funded project: Mobilising Public and Private Investments for NDC Implementation (MI).

 

 

Much of the ambition contained in African countries’ climate change commitments, articulated in their Nationally Determined Contributions (NDCs), is conditional on large amounts of private sector finance. In general, Africa is perceived as a risky investment destination and some barriers need to be addressed to enable the flow of much-needed investments to drive climate actions and support African countries in achieving their NDCs.

Cognisant of this, SouthSouthNorth (SSN), through funding from the German Government’s International Climate Initiative (IKI), has been supporting the mobilisation of capital for the implementation of Nationally Determined Contributions (NDCs), thereby assisting several developing countries towards realising their low-emission and climate-resilient development goals.

The MOU for the provision of technical support was entered in Addis Ababa between the Ministry of Water, Irrigation and Energy (MoWIE), and SouthSouthNorth (SSN), to facilitate the creation of an enabling environment for mini-grid systems in Ethiopia. SSN is working closely with Veritas Consulting (based in Addis Ababa) and Powerhive (a US-based firm) to identify potential levers and policy recommendations that will support the Government of Ethiopia in facilitating private sector investment in off-grid rural areas and in creating an enabling environment for the mini-grid sector.

The project has developed a financial model to enable MoWIE to evaluate and plan mini-grid projects, and further work includes the collection of data to validate 50 mini-grid sites in Ethiopia.

Tesfaye Hailu, SSN’s project manager, highlights that “although in its nascent stage in Ethiopia, mini-grids can be a cost-effective solution for electrifying rural communities where grid connection is a challenge. Particularly, with the current emphasis given to transforming the agriculture sector in Ethiopia and the focus on an integrated approach to strengthen rural Agricultural Commercialisation Clusters (ACC) that produce a number of high-value commodities, the provision of reliable off-grid energy using mini-grids will increase agricultural productivity in these clusters. Mini-grids are also important for the realisation of Ethiopia’s NDC targets as they reduce the consumption of fuel woods, which have a significant contribution to the country’s total greenhouse gas emissions”.

For more information on the project, contact:
John Thorne – John@southsouthnorth.org or Samson Mbewe – Samson@southsouthnorth.org