Pictured above Yvette Cooper, Secretary of State for Foreign, Commonwealth and Development Affairs, pictured with Abiy Ahmed Ali, the Prime Minister of Ethiopia
Gridworks, the UK government-backed investor in Africa’s electricity networks, has today signed an agreement with the Government of Ethiopia to develop and invest in the country’s first two privately financed transmission projects, with a combined value of around US$400 million.
The agreement was signed by the Ethiopian Minister of Finance H.E. Ahmed Shide and Gridworks’ CEO Chris Flavin and witnessed by Ethiopian PM, H.E. Abiy Ahmed and the UK Foreign Secretary, Yvette Cooper MP, as part of her visit to the east African nation. Gridworks is a subsidiary of British International Investment (BII), the UK government’s development finance institution.
The Joint Development Agreement between Gridworks, the Ethiopian Ministry of Finance and Ethiopian Electric Power applies to the delivery of two large-scale transmission projects:
The 206 km, 132 kV Degehabur–Kebridehar line connecting Ethiopia’s Somali region with the country’s central and northeast grids; and
The 198 km, 400 kV Hurso–Ayisha line enabling the development of new sources of energy in the northeast and strengthening the interconnection with Djibouti.
The projects will increase energy provision to meet growing industrial demand, boost the uptake of more sources of energy, strengthen Ethiopia’s grid, and enable interconnection with neighbouring countries. They will also support rural electrification in the long-term across Africa’s second most populous nation. The agreement also signals the continuing ambition of both countries to be strong investment partners committed to a deepening economic relationship.
With high industrial demand for reliable power and around half of the population without electricity access, Ethiopia urgently needs to improve electricity access for its population and strengthen its grid to fuel its growing economy.
There is an urgent, and widely recognised, need for investment in transmission across the African continent to support economic growth, enable the integration of new generation sources and to provide access to power for the 650 million people currently living without it. Investment in transmission will also be a major boost for businesses as it will increase access to high-quality grid power. Firms on the continent currently face, on average, a week of outages per month.
The scale of the challenge is significant, and private financing is an essential part of delivering the investment needed. Gridworks and others expect the Independent Transmission Project (“ITP”) market will develop in a way comparable to the Independent Power Production market, which is now well established and regulated across the continent.
Welcoming the announcement, H.E Mr. Ahmed Shide, Ethiopian Minister of Finance said:
“The Government of Ethiopia has set a target to increase the number of grid-connected citizens to 96%, and the amount of power availability to almost 20GW by 2030 as a part of its Ethiopia 2030: Ten Years Development Plan. These two projects – which demonstrate the growing government to government economic cooperation between our countries – will contribute to Ethiopia’s targets, bolster industrial growth by increasing reliability of power supply, and accelerate electrification rates.’’
Chris Flavin, Gridworks’ CEO added:
“Gridworks is delighted to collaborate with the Government of Ethiopia and Ethiopian Electric Power on these important projects. The projects are a key part of Ethiopia’s national development plan, and they support the Government of Ethiopia’s goal to provide low-cost reliable power to industry and universal electricity access for the people.”
British Ambassador to Ethiopia & Permanent Representative to the Africa Union H.E. Darren Welch said:
“Today’s agreement between Gridworks and the Government of Ethiopia signals the continuing ambition of the UK to be a strong investment partner. Transmission infrastructure is fundamental to growth, jobs and improving lives, and these projects will help unlock Ethiopia’s vast renewable energy potential. This investment shows how UK-backed partners can work with Ethiopia to deliver sustainable development, expand energy access and deepen the economic relationship between our two countries.”
Abebe Gebrehiwot Yihdego, Head of PPP Unit at the Ethiopian Ministry of Finance, said:
“I welcome this agreement with Gridworks as a major milestone for Ethiopia’s energy sector. These projects represent the first public-private partnerships in our transmission network and mark an important step in attracting more investment to the sector.
“By partnering with experienced international investors, we are strengthening our grid, unlocking renewable energy potential and delivering critical infrastructure in support of Ethiopia’s long-term development goals.”
Chris Chijiutomi, Managing Director and Head of Africa at BII, said:
“Providing access to affordable, clean energy, is an important development goal for BII, especially in the African continent. I am delighted that on completion, these projects will make a huge difference to the lives of so many Ethiopians.”
The projects announced today in Ethiopia are part of a growing portfolio of critical electricity network infrastructure that Gridworks is developing to deliver affordable and reliable power to Africa’s people and its businesses. These include several privately financed ITPs:
Chimuara-Nacala (Phase II & III), a $450m, 460km high voltage transmission line connecting central & northern regions of Mozambique.
Gamani Transmission, a project building 80km of high-voltage lines and two new substations in eastern Uganda.
Amari Power Transmission: a US$50m upgrade of four high-voltage substations in Uganda, likely to be the first privately financed transmission project to reach financial close in sub-Saharan Africa.
The Gridworks portfolio also includes Moyi Power, a greenfield, solar-powered utility providing electricity to a million people in three cities in DRC; and distributed utility companies, Sustainable Power Solutions and Anzana Electric Group.