Wednesday, February 8, 2023
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BusinessEthiopia's 2025 plan for universal electrification Falls short of USD 6bln

Ethiopia’s 2025 plan for universal electrification Falls short of USD 6bln

Ethiopian officials on Wednesday said the plan to supply and reach full electric access by 2025 is short of USD six billion in finance.

An eight-year national electrification roadmap, extending from 2017 to 2025, was launched in 2018 to attain universal electrification. It aims to increase the electricity coverage across the nation to 100 percent by 2025.

Deputy CEO of the Ethiopian Electric Utility (EEU), Bizuwork Demse told The Reporter that the government’s plan is to increase the existing 4.2 million customers to 25 million. Efforts to persuade authorities to allocate more budget for EEU did not bear fruit. Its budget hovered around two billion birr.

Until recent years, the government has been allocating two billion birr in budget for the EEU. But in the past two years, its budget has decreased to one billion birr, Bizuwork told The Reporter.

The universal electrification access plan commenced in 2019, however, limited sources of finance is making it difficult to reach the intended target.

Bizuwork said, of the USD six billion required for the plan, the country only secured USD 800 million from both the World Bank and the Access to Distributed Electricity and Lighting in Ethiopia (ADELE) Project.

He says critical shortages of source of finance in both local currency and foreign exchange has made the plan unattainable within the intended time frame.

The plan was initially envisioned to avail power and achieve the country’s aspiration to reach the lower middle-income target by 2025. It also plans to boost the country’s industrialization ambitions by augmenting the current 4,280 MW electricity generation capacity to 17,300 MW by 2025 and power generation projects of hydro, wind, geothermal, solar and biomass sectors.

When the plan was first initiated, the government had sought to invite private investors to invest in power generation alongside the government.

“In recent years, the government’s budget allocation scheme to the EEU has diminished from year to year, while it expected an increase in funding to fulfill the plan,” Bizuwork told The Reporter.

In spite of persistent financial hurdles, the EEU s has plans to increase its customer base by one million annually, Bizuwork says.

Despite electricity being the backbone of the economy, Bizuwork stated that they line up together with individual importers to get foreign currency. He said they are forced to wait up to six months to acquire forex from Banks, which is ultimately affecting the institution.

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