Thursday, July 25, 2024
Business“Count on us”: PM vows to support UAE power investors

“Count on us”: PM vows to support UAE power investors

The investors plan to generate 500 MW of solar power

Prime Minister Abiy Ahmed (PhD) presided over the signing ceremony of a Memorandum of Understanding (MoU) between a UAE based energy firm and the Ministry of Finance (MoF), to generate 500 MW energy in the country. Committing his Office’s support to the investors, the PM said “Count on us.”

The UAE firm, Masdar Abu Dhabi Future Energy Company PJSC, intends to implement a solar power generation project in Ethiopia, in partnership with the government under the Public Private Partnership scheme.

Reminding that Ethiopia’s more than 100 million population is not just a huge market but presents trusted partners, the PM said this signing is a step following his administration’s repeated discussions with the authorities in the UAE.

He said that Ethiopia has abundant resources but “realization of the potentials requires trusted partners like you.”Abiy also said that his administration requires them to be practical and deliver the projects soon and they can call his Office anytime they face challenges.

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“We wanted this project yesterday, not today,” Abiy said adding, “If you act fast, you’d get all the support you expect from us.”

Mohammed Jameel, the CEO of Future Energy, also promised that the PM and his administration can depend on them.

“We satisfy your expectations and your people’s expectations,” he said.

The CEO also highlighted that his company operates in 30 countries and considers Africa, especially Ethiopia, an important partner for them.

Signing the document, the Minister of Finance, Ahmed Shide stated that the current signing formalizes the various discussions that preceded it to realize the project.

The Abu Dhabi Development Fund, an emerging supporter of the Ethiopian development finance, is expected to finance this project, although the exact investment requirement will be known after project studies are carried out.

According to Ahmed, the aim is to generate between 2,500 and 3,500 MW of solar energy with this company. The government’s plan to involve the private sector in infrastructure development aligns with the government’s economic reform and more UAE investors are expected to come in the logistics and transportation sectors.

Currently, 96 percent of Ethiopia’s power comes from hydroelectric dams while the remaining four percent is generated from wind. According to the WB financing project appraisal document for investment guarantee released in 2019, Ethiopia has a potential to generate 5.5 kW/m2/day of solar power, 30,000 MW of hydropower, 10,000 MW of geothermal power, and 5,000 MW of wind power.

The WB, hence, advises, “Ethiopia’s annual energy consumption per capita (around 120 kWh) is still an order of magnitude smaller than that of countries such as India (806 kWh), Vietnam (1,411kWh), and China (3,927kWh). Economic growth leading to increasing per capita energy consumption would further require accelerated investment in energy infrastructure in the medium term.”

By the year 2025, Ethiopia also plans to export 1000 MW of power to neighboring countries and generate annual revenues of USD 500 million apart from meeting local demands.

“By 2025, the required power production could reach up to 40,000 GWh (up from about 14,000 GWh in 2018), of which, nearly 25,000 GWh is expected to be from the domestic market,” the WB assessed. It also added “It is optimal for Ethiopia to build as much as 4,071 MW of new solar and wind power capacity between 2019 and 2030, providing about 10 percent of supply by the end of this period.”

Although the potential investment amount of this specific project is not yet disclosed, a similar project signed in 2020 between an Australian firm, Lotus Energy, and the Endowment Fund for the Rehabilitation of Tigray (EFFORT) intended to build 500 MW of solar park at a cost of USD 4.3 billion.

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