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Ethiopia: Legal Framework to be Formulated for Private Investment in Renewable Energy

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The Ministry of Water and Energy is planning to develop a legal framework to facilitate private investment in renewable energy generation and distribution. In collaboration with the International Solar Alliance, the Ministry held a consultation in Addis Ababa this week, to promote the widespread adoption of solar energy in the country and mobilize resources for the development of these legal frameworks.

The government currently has a monopoly on electricity supply and distribution in Ethiopia, but State Minister of Water and Energy Sultan Weli acknowledged that this centralized approach has hampered progress. In order to alleviate the problem and enable private sector participation in the sector, the government is preparing a comprehensive legal framework, including policies, decrees, and guidelines.

Despite Ethiopia's abundant solar resources, only a fraction (400 megawatts) of its potential has been utilized. The State Minister attributed this underutilization to the lack of a legal framework that allows private developers to invest in the sector. He explained that without such a framework, private investors could not demand payment for the sale of solar energy.

The representative of the International Solar Alliance, Frehiwot Woldehana, pledged the alliance's support for expanding solar energy development in member countries. Accordingly, the alliance would provide technical and financial assistance and actively involve in supporting projects to attract large-scale private investment in the sector, with a focus on showcasing these projects in various locations.

Source: Fana BC