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The Ethiopian government and World Bank Group (WBG) are holding high-level talks about the first round of the Scaling Solar programme, in which Saudi Arabia’s Acwa Power was awarded two 125MW projects – Gad and Dicheto – on 11 September after bidding $0.02526/kWh. However, questions are being asked about the disqualification of the four remaining bidders. The involvement of the International Finance Corporation in the bids appears to have raised unexpected issues, while the process also encountered challenges around foreign exchange and Ethiopia’s difficult macroeconomic environment.

The World Bank Group (WBG) Scaling Solar programme has again delivered some of Africa’s lowest tariffs after Ethiopia’s Public-Private Partnership Board approved on 11 September Acwa Power as preferred bidder for the Gad and Dicheto solar PV projects, both 125MW. Acwa Power bid a tariff of $0.02526/kWh, the lowest solar price on the continent and among the lowest for a greenfield project of any technology. Twelve bidders were shortlisted for the tender, of which five submitted bids.

Ethiopia released the second iteration of its National Electrification Programme in March, a 216-page document setting out the government’s least-cost approach to reaching universal access to power by 2025. The plan envisages 65% of customers being on-grid and 35% off-grid. Off-grid would then be phased out by 2030, leaving only 4% of the population off-grid, to be replaced by grid extension, which the government expects to be the least-cost option for all households by 2025.

Efforts to encourage private investment in power were under way in Ethiopia before Abiy Ahmed became prime minister in April 2018, but it is only since he assumed office and launched wide-ranging political and economic reform that a credible programme has emerged. The scope of the power sector reforms is impressive, covering utility debt, sector organisation, tariffs, electrification, subsidies and private generation.

Government efforts to improve the economics of Ethiopia’s electricity supply industry encompass the full sweep of the supply chain, including improving collections, utility unbundling, debt restructuring, private investment in generation, least-cost electrification, capacity building and tariff increases. At the core of the reforms are efforts to improve the financial strength of the utilities and increase sector liquidity. Ethiopian Electric Power Corporation was split in 2013 into Ethiopian Electric Power (EEP), responsible for generation and transmission, and Ethiopian Electric Utility (EEU), responsible for distribution.

Procurement of consultants for the Ethiopia Renewable Energy Programme I is expected to begin during June. The project is backed by a grant from the African Development Bank-managed Sustainable Energy Fund for Africa and aims to increase electricity access and diversify the energy mix through procurement of renewable energy independent power producers (IPPs).

The World Bank Group’s International Finance Corporation Advisory is in preliminary discussions with Ethiopian Electric Power to be the lead transaction adviser for the second round of the Scaling Solar programme, which could procure up to 750MW of solar power, and for wind power procurement, potentially through a Scaling Wind initiative.

The World Bank Group (WBG) board of directors on 23 May approved guarantees worth up to $200m for renewable energy independent power producer (IPP) projects in Ethiopia under the International Development Association’s Renewable Energy Guarantees Programme (Regrep). The programme will be implemented in phases until end-2025, starting with a $10m guarantee for the $120m 100MW Metehara solar photovoltaic (PV) project and followed by three further phases. The guarantee programme could eventually support projects worth more than $1.5bn, adding more than 1GW of wind and solar PV capacity to the grid.

Kenya and Ethiopia are reviewing an agreement signed in January 2012 for Kenya to buy 400MW of hydropower from Ethiopia. Implementation has been hit by delays in completing the 1,045km interconnection line.“We’re currently in negotiations with Ethiopia on revising the PPA [power purchase agreement]. Details will be provided later on once we finalise,” Kenya Power acting managing director Jared Othieno told African Energy.The 2012 agreement obliges Kenya Power to buy 400MW at a fixed tariff of $0.07/kWh for onward sale to homes and businesses in Kenya.

Another two projects have been added to the Scaling Solar round II tender in Ethiopia, where prequalification got under way on 16 April. Six solar photovoltaic (PV) projects will now be tendered with a combined capacity of 750MW, with sites in Metema-Bahir Dar and Hurso joining those at Weranso, Welenchiti, Humera and Mekele. The deadline for prequalification has been revised to 9 July. A request for proposals for two 125MW PV projects was launched on 3 April as part of Scaling Solar round I. Contact: [email protected], [email protected], [email protected].

Tulu Moye Geothermal Operations (TMGO) is seeking expressions of interest for an engineering, procurement and construction (EPC) contractor for the 50MW first phase of the 520MW Tulu Moye project in the Eastern Rift Valley. TMGO is wholly owned by Tulu Moye SAS, which is owned in turn by the Meridiam Infrastructure Africa Fund and Reykjavik Geothermal Ltd.The contractor will provide a turnkey geothermal power plant and associated steam field gathering system. This is the first phase of a two-stage prequalification process and aims to compile a longlist of qualified contractors.

The Finance Ministry’s Public-Private Partnership Directorate General (PPP-DG) launched a request for proposals on 3 April for two 125MW solar photovoltaic (PV) projects being developed through the World Bank Group’s Scaling Solar programme. Twelve prequalified bidders have been invited to participate and bids are due before the end of June. Soon after, on 16 April, the PPP-DG issued a request for prequalification (RfQ) for the second round of the programme, which will procure up to 500MW from four sites.

Ethiopian Electric Power is requesting expressions of interest from consultants to prepare or update feasibility studies for five hydropower plants. The work is being funded through the $122.5m African Development Bank (AfDB)-backed Mekele-Dallol and Semera-Afdera Power Supply for Industrial Development and Access Scale-up Project. Submissions are due by 8 March.Two lots are being tendered.

A feasibility study has begun into the potential for cooperatives as a business model in electricity provision in Ethiopia and Nigeria. The African Development Bank (AfDB)-managed South-South Cooperation Trust Fund is funding the study, which is being carried out by the United States’ industry association, the National Rural Electric Cooperative Association International (NRECA International). It is scheduled to be completed in May this year and will inform plans to pilot the model in the two countries.

Ethiopia and Djibouti signed a new agreement on 17 February for a project to build a gas pipeline from the Ogaden Basin to the coast. The pipeline will be followed, in a second phase, by the construction and operation of a natural gas liquefaction plant and a gas export terminal in the Damerjog area, near Djibouti’s border with the self-declared Republic of Somaliland.