Tapping renewable energy sources for building climate resilient economy

Ethiopia is one of the agrarian economies in the world. The sector employs more than 75% of the labor force, supplies food to the urban consumers, provides inputs to agro-industries, contributes to foreign currency earning and supports the government endeavor for ensuring food security.

However, it is characterized by traditional way of farming utilize animal and human labor, less agricultural inputs and moreover, it is vulnerable to climate change and global warming.

When agriculture is hit by climate change the whole economy also will be disrupted because it is a back bone.

Global warming induced by emission gas released by the industrial countries critically impacts developing countries agriculture sector in general and Ethiopia in particular.

When rain fails agricultural yields decreased and left farmers to survive in foreign food aid. They also might face displacement. Due to drought water points will be dried up, the rivers water volume will be decreased as the result, irrigation farms, and dams will face shortage of water and cripples their production capacity. When hydropower dams generate electric power below the average level due to shortage of water, the electric supply to the manufacturing sector is reduced which again results in low output and creates scarcity of products in the market.

To the other extreme when over flooding occurs due to heavy rain induced by climate change, agricultural and energy sectors also will be affected.

Though Ethiopia’s contribution to the global warming and climate change is insignificant for global warming and climate change, it is critically suffer from the brunt of global warming.

In fact, the majority of the population in Ethiopia resided in the rural part is heavily dependent on bio mass energy for household purpose derived from the clearance of vegetation cover, cutting trees and deforestation.

Such practice again poses soil erosion, land degradation and creates ecosystem imbalance, flood during rainy season in which inhibits the flow of water to underground and ultimately results in low agricultural yield.

The utilization of bio mass energy not only endangered the environment and the ecosystem at large but also it is a major health risk due to in house pollution. According to the recent report of the Ministry of Health, in house pollution is proved that it is the number one factor for child mortality due to respirational defect.

The government long ago, to reduce the clearance of vegetation cover and cutting tress in the rural parts for house old energy purposes, supplies energy saving stoves which deduct the rate of cutting trees and supplies solar panels to the rural population. It also gave literacy education on how to utilize energy saving stoves and solar devices. The involvement of private sector in this venture has been immense. In addition, it continued its rural electrification scheme generated from hydropower.

To withstand global warming and climate change and attain sustainable development, the government launched Climate Resilient Green Economy (CRGE) in 2007.

Among the various measures that have been taken to meet the goal are developing renewable energy sources, enhancing proper waste management efforts and afforestation campaign on the yearly base during the rainy season can be mentioned.

The Green legacy initiative launched by Prime Minister Abiy Ahmed (PHD) six years ago focusing of tree planting played pivotal role in advancing building Climate Resilient Green Economy. Afforestation enabled balancing the ecosystem, protect soil erosion and land degradation, facilitate water percolation to underground water which is the source of water points, streams and rivers. In addition, it plays pivotal role in carbon sequestration and boost carbon trading which enhance the nation foreign currency garnering capacity.

In the last 20 years, a number of electric power dams including the ongoing construction of Abbay Dam being eying its accomplishment. Wind farms are also constructed by foreign investment. Solar panels have been distributed in many parts of the country and in this regard the role of the private sector is immense. The geothermal exploration projects in the place known as Alutolangano in Oromya region by foreign companies are undergoing for the last 15 years.

The exploitation of renewable energy helps the nation to save the badly needed hard currency allocated for the importation of carbon based petroleum oil which poses environmental hazardous effect.

According to the African Energy Chamber recent report Ethiopia’s Minister of Water and Energy Habtamu Itefa Geleta will speak at the African Energy Week (AEW): Invest in African Energy 2024 conference – scheduled for November 4–8 in Cape Town. The event is the biggest of its kind in Africa and the participation of Minister Geleta underscores Ethiopia’s commitment to advancing its energy sector through significant investments and strategic international partnerships.

Ethiopia’s current installed power generation capacity is measured at 5.2 GW, with plans in place to increase this figure to 17 GW within the next decade. While renewable energy constitutes a primary energy source for the country, the confirmation of seven trillion cubic feet of natural gas in the Ogaden Basin by the government in 2022 has opened up new investment avenues for energy companies. A largely undeveloped sector, natural gas stands to transform both the country and broader region’s energy matrix. During the AEW: Invest in African Energy conference, Minister Geleta will unpack the country’s potential in this area, engaging with investors and regional counterparts.

Ethiopia has the potential to generate over 60 GW of electricity from hydroelectric, wind, solar and geothermal sources. Hydropower remains the dominant source in the country, contributing over 90% of the country’s electricity, exemplified by projects like the 6 GW Grand Ethiopian Renaissance Dam and the 2.1 GW Koysha Hydro Power dam by the Omo River. In January 2024, the dam was 94% complete, and once operational, it will become the largest hydroelectric power plant in Africa.

Meanwhile, Ethiopia’s wind sector is growing with projects such as the Ashegoda and Adama wind farms – generating more than 350 MW in total. The state-owned Ethiopia Electric Power (EEP) signed a $600 million deal in December 2023 for a new 300 MW wind farm in the eastern Somali region with UAE-based project developer Asia-Pacific Middle East and Africa /AMEA/ Power. In the solar industry, the EEP signed an agreement with the International Finance Corporation to advice on developing up to 500 MW of solar power under the World Bank’s Scaling Solar program – an initiative that supports solar expansion worldwide. The government views private sector collaboration as a catalyst for project development and companies are invited to join the market through public-private partnerships and independent power producer programs.

Alongside wind and solar, the country’s geothermal potential is estimated at over 10 GW. There is a projected $35 billion investment pipeline planned for Ethiopia and Kenya to develop geothermal in the East African Rift, highlighting the potential in this area. By 2050, these two countries are expected to produce 90% of the planned 13 GW of geothermal energy in Africa.

Meanwhile, the African Development Bank (AfDB) recently allocated $8 million this month to support Ethiopia’s Renewable Energy and Agriculture Modalities mini-grid program, developed in collaboration with the Global Alliance for People and Planet and key Ethiopian government bodies. This initiative aims to integrate mini-grids with agribusiness operations, with up to 50% of the program’s funding sourced from the AfDB-managed Sustainable Energy Fund for Africa, providing concessional loans, grants and risk mitigation. Additionally, the AfDB has approved a $104 million grant for a transmission project aimed at enhancing Ethiopia’s electricity supply. The project involves constructing 157 km of transmission lines and associated substations near the cities of Harar, Jijiga, and Fafem.

“Ethiopia is taking a proactive stance in fostering sustainable energy development and collaboration with international stakeholders. The country is leading a just energy transition, prioritizing the development of all available energy resources. Offering a wealth of opportunity for natural gas and renewable energy players alike, Ethiopia stands to play a central role in meeting East Africa’s demand for energy in the long-term,” states NJ Ayuk, Executive Chairman of the African Energy Chamber.

During AEW: Invest in Africa Energy 2024, Minister Geleta will participate in high-level panel discussions and spotlight sessions, showcasing Ethiopia’s investment potential and highlighting the government’s proactive approach towards sustainable energy development.



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