Wednesday, June 19, 2024
BusinessPrivate enterprise joins power sector to meet humanitarian energy needs

Private enterprise joins power sector to meet humanitarian energy needs

It is armed with USD 2.5 million capital

Camps for the displaced and other humanitarian facilities will soon be able to buy electricity from a private off-grid power service provider.

The Petroleum and Energy Authority (PEA) issued a license to the private company established following the directive in place since 2020, which governs mini-grid electricity generation and distribution as well as sale.

Humanitarian Energy Plc (HumEn), a company established with international and local shareholders, Mercy Corps Global and Rensys Engineering & Trading PLC, received the license to provide solar-sourced electric power to refugee camps and host communities in the area where there is a humanitarian need.

Incorporated in Ethiopia this year, HumEn plans to make Ethiopia the leading country with private companies focusing on the provision of electricity to humanitarian areas.

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According to Andrea Ranzanici, managing director at HumEn, his company plans to make a total capital investment of USD 2.5 million.

With the plan of serving about 1,800 clients in the refugee camps and neighboring communities, the company is to begin operations in the Somali Regional State, with the ambition of going nationwide later. Their client bases would be households, businesses, and social institutions such as humanitarian agencies.

“The underlining assumption that had been carried out was that the camps were temporary and would be dismantled. Unfortunately, camps stay longer, about 20 years on average,” Andrea said. “We are obviously taking the market risk.”

The company will install a facility in the region that has a capacity of producing 253 kWp from solar, with the backup of batteries to keep the power going when the sun sets. Even though the off-grid solution service providers are booming in neighboring countries like Kenya and across the continent, Ethiopia will be in the forefront for humanitarian settings.

With the largest share of the global humanitarian organization Mercy Corps and a minority share of the local one, Rensys Engineering & Trading PLC, the company is in the initial stage of importing materials and will start building after a groundbreaking ceremony in February 2023, Andrea says.

According to the managing director, the tariffs are not the same as the government’s, which are subsidized. “The tariffs are not as low as what the government provides, but they will not be expensive either,” he said.

“Focusing on humanitarian settings is defined by our investors, but similar models can and should be replicated by other players all across rural Ethiopia where power supply is not available. This would allow a good integration with the expansion of the national grid towards a quick electrification of the country and the achievement of universal electrification by 2025, as targeted by current policies,” he added.

There had also been a few other off-grid electricity power generators currently operating and selling power to the neighborhoods around their facilities, according to an official at the Authority. However, following the issuance of Mini-Grid Directive 2020, HumEn is the first to secure a license.

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