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The ideal environment for IPPs

Interview - February 15, 2016

With more than 45,000MW of untouched hydro potential, plus huge resources of solar, wind and geothermal energy to tap, along with rising domestic demand for electricity, pro-investment policies, and plans laid out for Ethiopia to become a region-wide clean energy exporter, CEO of Ethiopian Electric Power Azeb Asnake explains why independent power producers (IPPs) are keener than ever to plug into the country’s diverse renewable energy mix.



How do you view the prominence Africa is gaining in the international arena?

Africa’s potential is gaining importance in different sectors, having said that, I personally would like to highlight the energy potential in Africa. As you are aware of, Ethiopia’s potential is matching countries such as Democratic Republic of Congo, especially in hydropower. At the moment we have more than 45,000 megawatts of hydro potential that can be developed. Of course there are other renewable energy sources as well like solar, wind and geothermal. Ethiopia’s energy policy is to promote green energy, as renewable energy is the major source of our energy generation.

Africa benefits from huge potential in natural resources that have been underexploited due to conflicts and adverse circumstances that hindered us from reaching our full potential. These days there is a common priority among all African countries: human and economic development across all sectors, be it transportation, energy, manufacturing, etc.


Ethiopia is working towards regional integration through electric power lines and you are now chairing the East Africa Power Pool (EAPP). How will a real electric integration contribute to the industrialization efforts of the continent?

Currently we are exporting to Sudan, Djibouti, and border villages in Kenya. We are working on the construction of the transmission line that goes from Ethiopia to Kenya, which can carry about 2,000MW of energy. The first phase of the project will allow the transmission of 400MW to Kenya. Upon completion of the megaprojects like the Grand Ethiopian Renaissance Dam and Gibe III, Ethiopia will become a major regional clean power exporter.

Regarding the regional integration efforts, we already have signed export MoUs with different countries like Tanzania, Burundi, Rwanda and other neighboring countries. This integration means a lot to Africa, because it promotes political and economic regional stability. In Ethiopian Electric Power, we have an ambitious vision to expand our network and export capacity towards northern Africa, the Middle East and Europe.

Electric integration is critical to the industrialization efforts of Africa. Ethiopia aims to become the clean energy hub of the region and initiatives such as the East African Power Pool are essential to strive towards regional integration.


The country’s flagship project, the Grand Ethiopian Renaissance Dam, could turn Ethiopia into Africa’s water powerhouse with its 6,000MW. The World Bank estimates Ethiopia could earn $1 billion a year from electricity exports. What impact are you expecting, both for Ethiopia and its neighboring countries, once it’s in full operation?

The power export potential of Ethiopia is fully dependent on mega projects such as the Grand Ethiopian Renaissance Dam, Gibe III and Corbetti, among others.

We cannot undermine the local demand as well. We should be able to generate the power needed to meet the demand rising from the ambitious housing projects, the railway expansion, the industrialization, the growing population, etc. Fortunately, we have the generation capacity and potential. There is a rising demand we cannot fulfill at the moment. That is why we need the involvement of investors and independent power producers to come and work with us.


How are you promoting and encouraging private sector investment?

The private sector should choose Ethiopia because we offer a favorable investment climate and political and economical stability. Likewise, the double-digit growth that has defined Ethiopia in the last decade is not based on oil nor volatile commodities. The existing policies and reforms make investment in Ethiopia very attractive.


What message of confidence do you want to send to the international community?

The entire world must strive for green economies and Ethiopia is leading by example as the GTP 2 is laying the foundations for sustainable growth and a Climate-Resilient Green Economy. Regarding our sector, we have an immense potential to produce renewable energy – why would we do it otherwise?

The GTP 2 requires a lot of capital inflows but also offers attractive opportunities for the private sector. Unlike in the past, we are not asking for aid nor loans, but for investment and trade facilitation. In the energy sector for example, at least 50% of the investment required should come from independent power producers (IPPs). We are inviting international partners to come to Ethiopia and invest as there is a lot to be done. We want to work hand in hand with them, because knowledge transfer and building capacity means everything to us.


How challenging has it been for a public institution like yours to partner with foreign private institutions?

Dealing with independent power producers is of course something new for us. For instance, the Corbetti project took three years of negotiation, as we did not have the required legal framework. The transition was a bit challenging and time consuming but we are now ready for future IPPs in other projects. Building capacity is very important as well when it comes to collaborate with the private sector.


How important is it for Ethiopia to diversify its energy sources?

Energy diversification is one of our priorities. Even though Ethiopia has a very big potential in hydropower, we should not be dependant. At the present time 98% of our power generation comes from hydroelectric sources and that can be a problem when we face adverse climate events such as El Niño. That’s why we need to promote diversification and increase the generation mix of wind, solar and geothermal. We are also working to develop off-grid electric generation in solar, wind and small hydroelectric, which are all open for investment.


What would you say to the people wanting to invest in Ethiopia with regard to the availability of power for industries?

Industries require reliable and large energy solutions. We have come with hybrid strategies that include systems to time-shift solar power at night. We are also striving to guarantee universal access to electricity in remote areas and achieve 90% electricity access by the end of GTP 2.


How would you assess the relationship between Ethiopia and the UK?

The outcome of the Ethiopia-UK Trade and Investment Forum, held in London on October 25 2015, was very promising. The forum was a great attendance success and we have noticed there is a growing interest in investing in Ethiopia. We had the chance to present our investment opportunities that will serve as a starting point for future negotiations and win-win partnerships. Following that forum, we are coordinating with the Ministry of Foreign Affairs to liaise with the attendants and invite them to come and work with us.


You started working for the formerly named Ethiopian Electric Power Corporation back in 2006. You were appointed project manager of the Gibe III and you were also given the Women in Construction Excellence Award. Would you consider yourself as a role model for African women?

I started in this company with Gibe III while it was at the negotiation stage. Now that it has been completed, I feel immensely happy and proud. When you are on the construction site on a daily basis, you feel like it is a child growing; that is why I refer to it as my third baby. I am glad to think that other women in Ethiopia and maybe elsewhere in Africa can learn from me.

When I graduated as a civil engineer, I knew I had to be psychologically ready to work away from home in remote areas where the dams are built. Everybody was surprised when I was appointed as project manager of the biggest electric power plant of Ethiopia at that time, as men have always led this sector. At first I was shocked, but I had the full support of my family.

This experience was like another school for me; I have learned a lot, how to manage a project, how to lead a team, how to deal with logistics, etc. You have to be smart and you have to be open to learn. I do not believe in the “do this, do that” type of management, I like listening to people, learning from them and applying that transferred knowledge.

It was hard work, full of challenges, but the benefits I got from that project are uncountable. The Gibe III is still under my supervision, while being the CEO; I am still the project manager of my first project in this company.

My team was very young and eager to work hard and I always say how lucky I have been to have them. Today they are very mature professionals and I consider myself as a role model for them. Sometimes I give speeches at university to encourage students to finish their engineering degrees, especially for women struggling to complete studies traditionally reserved for men. That is something I feel very proud of.