This is a best prospect industry sector for this country. Includes a market overview and trade data.
Last Published: 11/5/2018


Ethiopia has abundant renewable energy resources and has the potential to generate over 60,000 megawatts (MW) of electric power from hydroelectric, wind, solar and geothermal sources. As a result of Ethiopia’s rapid GDP growth over the previous decade, demand for electricity has been steadily increasing. Despite Ethiopia’s huge energy potential, the country is experiencing energy shortages as it struggles to serve a population of over 100 million people and meet growing electricity demand which is forecast to grow by approximately 30% per year.

Energy Resource Potential of Ethiopia



Exploitable Reserve

Exploited Percent







4 – 6


Wind: Power









Million tons



Agricultural waste

Million tons



Natural Gas

Billion m3




Million tons



Oil shale

Million tons



                         Source: Ethiopian Electrical Power (December 2016)

Ethiopia’s Growth and Transformation Plan (GTP) outlines a 15-year plan with three 5-year phases to transform Ethiopia from a developing country to a middle income country by 2025. Under GTP I (2010-2015), the goal was to increase the installed generation capacity from 2,000 MW to 10,000 MW primarily through hydro power projects. With some of those projects still under construction, the country currently has approximately 4,500 MW of installed generation capacity. Under GTP II (2015-2020) the goal is to increase installed generation capacity by an additional 5,000 MW by 2022. Ethiopia Electric Power (EEP) is charged with maintaining more than fourteen hydropower and three wind power plants located in different parts of the country.

The Government of Ethiopia has focused on the construction and expansion of various power generating projects to deliver reliable electricity. Approximately 90% of the installed generation capacity is from hydropower while the remaining 8% and 2% is from wind and thermal sources respectively. The hydro dominated systems have been severely affected by drought, and the Government of Ethiopia (GOE) is now diversifying the generation mix with other sources such as solar, wind and geothermal that will result in a more climate-resilient power system.

The Metahara solar independent power producer (IPP) project is expected to generate 100 MW following approval of the implementation agreement (IA) by the Ethiopian government during the second half of 2018. Enel Power, an Italian company, will operate the project. The government of Ethiopia is also working with the private sector to implement the Corbetti and Tulu Moye geothermal projects with over 1,000 MW of combined generation capacity. Ratification of IAs by the House of Peoples Representatives is the last critical step to concluding these two 520 MW projects. On August 19, 2018, Africa’s first waste to energy facility, with  a generation capacity of 25 MW of electricity, was inaugurated in Addis Ababa. This facility has the capacity to consume 420,000 tons of trash per year.

The Grand Ethiopian Renaissance Dam (GERD), expected to be the largest dam in Africa and to generate 6,450 MW of electricity at full capacity, is reportedly 62% completed. The GOE has prioritized construction of the GERD, which is intended to serve as an engine for industrialization and economic development. Ethiopia exports electricity to Djibouti (up to 100 MW) and to Sudan (up to 100 MW) and has concluded power export deals with Kenya and South Sudan. Construction of an Ethio-Kenya-Tanzania transmission line is expected to be completed in 2019. Ethiopia has plans to export up to 400 MW of electricity to Kenya and 400 MW to Tanzania.

The GOE plans to construct an additional 9,000 kilometers of distribution lines and to complete, in the next few years, construction of 102 kilometers of 66 KV transmission line, 3,706 kilometers of 132 KV transmission line, 4,546 kilometers of 230 KV transmission line, 2,947 kilometers of 400 KV transmission line and 61 kilometers of 500 KV transmission line. The total transmission line length has reached 19,664 km. Only 30% of the country has access to electricity, of which only 60% of households are connected to the grid.
The GOE recognizes that partnership with the private sector via IPP agreements for power generation is crucial to meeting the country’s needs. Ethiopia Electric Power (EEP) has developed procurement processes to select contractors and is awarding projects using a competitive bidding process. Under the Global Procurement Initiative (GPI), Crown Agents International, a U.S. based firm, has developed a procurement manual for EEP using a U.S. Trade and Development Agency (USTDA) grant. The procurement manual was launched in June 2018 during the visit of Gil Kaplan, Under Secretary of Commerce for International Trade. Power Africa has assisted EEP with the development of IPP tender documents and the legal and regulatory IPP framework. In February 2018, Ethiopia has enacted a proclamation that will regulate public private partnership (PPP) arrangements, in an effort to attract investment and in recognition that the private sector is essential to supporting the country's economic growth and improving the quality of public services, particularly in infrastructure. Ethiopia is drafting its feed-in tariff bill, which should offer independent power producers the option to sell renewable energy power to the national grid at specified rates. engineering procurement and construction (EPC) contracts are still considered as unsolicited proposals when companies are providing turnkey solutions and bring the financing. Most new EEP projects are tendered.

Power Africa Support:
To help achieve Ethiopia’s goals of expanding access to electricity under the Growth and Transformation Plan and National Electrification Program, Power Africa supports the development of new generation and connections, rehabilitation of the distribution system, self-sufficient utilities, and delivering power to the majority of the population living off-grid. This support is delivered through wide-ranging technical assistance in cooperation with international finance institutions and other development partners. In supporting the entry of the private sector, Power Africa has assisted with new IPPs and the transition to competitive tendering, as well as strengthened the energy regulator.

Energy sector support in Ethiopia is in line with Power Africa 2.0 objectives, which include advancing sustainable development through private sector led partnerships; promoting economic prosperity; and an increased focus on the enabling environment, transmission, and distribution. Technical assistance includes:

•           Developing laws and regulations that will facilitate private-sector investments through Independent Power Producers (IPPs) in geothermal, solar, wind, hydro, and biomass generation projects;
•           Supporting Ethiopian Electric Power’s (EEP) use of competitive and transparent procurement process for IPP generation projects;
•           Assisting EEP and Ethiopian Electric Utility (EEU) with the planning, operation, and maintenance of generation, transmission, and distribution systems as the grid is expanded;
•           Introduction of the national grid code and support to the Ethiopian Energy Authority (EEA) in its implementation and enforcement;
•           Developing a process for EEU to improve distribution efficiency and assist with introduction of “smart grid technology”;
•           Strengthening the ability of EEA to determine tariff rates, and issue energy licenses and permits; and,
•           Support to off-grid electricity planning;
•           Supporting the Eastern Africa Power Pool to promote cross border power trade between Ethiopia and other member countries.
For more information on the Power Africa strategy to address key challenges in Ethiopia’s electricity sector and their support for private sector investment in energy, please refer to:

Renewable Energy Market                                

Unit: USD ‘000
Total Market Size 
Total Local Production502,972151,263 
Total Exports15,22884,000 
Total Imports
1,783,026    1,341,534
Imports from the U.S.42,393                  98,321  
Exchange Rate:
21.58 Br27.44- 
Source: National Bank of Ethiopia and EEP

Leading Sub-Sectors
•           Engineering services to supply more renewable energy sources, such as wind, solar, geothermal, biomass (municipal landfills, organic waste) as well as hydropower, are highly desired in Ethiopia.
•           Supply and/or manufacturing of drilling rigs and associated equipment, sub stations, hydro turbines, electric and electrical cables, transformers, transmission equipment, electric meters, and expertise are desired.

The GOE has opened the renewable energy sector for private sector involvement in competitively tendered IPP hydro and solar projects. In addition to the generation of power from renewable energy sources, aging power plants, substations and transmission lines require substantial maintenance and overhaul so as to increase the overall efficiency. This maintenance works are priority business opportunities for U.S. businesses or investors.

Upcoming Tenders
No.ProjectsCapacity (MW)StatusSource
1Tekeze II450Under tender preparationHydro power
2Gojeb150Under tender preparationHydro power
3Lower Dedesa550Under tender PreparationHydro power
4Lower Dabus250Under tender PreparationHydro power
5Additional Solar500Under IFC scaling solar programSolar
6Additional wind1000Under discussion to collect dataWind
7Biomass420Under early stageBiomass

For specific details on the tender announcements and instructions, please refer to Ethiopian Electric Power Company’s website:
Please refer to the Project Financing section of Chapter 7: Trade and Project Financing for specific project opportunities.

Web Resources

US Foreign Commercial Service,

Power Africa
United States Agency for International Development

Ethiopian Electric Power (EEP)

Ethiopia Electric Utility (EEU)

Ministry of Mines

Ministry of Water, Irrigation, and Energy

​​​​​​​The World Bank

Prepared by our U.S. Embassies abroad. With its network of 108 offices across the United States and in more than 75 countries, the U.S. Commercial Service of the U.S. Department of Commerce utilizes its global presence and international marketing expertise to help U.S. companies sell their products and services worldwide. Locate the U.S. Commercial Service trade specialist in the U.S. nearest you by visiting

Ethiopia Energy Trade Development and Promotion