Hailemariam highlights state’s role in Africa’s energy development

  • PDF

Addis Ababa, 3 June 2014 (WIC) – Prime Minister Hailemariam Desalegn made the case for a more active role of the state to develop the underexploited energy sector in Africa.
Opening the U.S.-Africa Energy Ministerial Conference at the headquarters of the African Union in Addis Ababa, Hailemariam highlighted the state’s important role in the energy sector ‘until the private sector is proven fit to undertake the task’.

Despite a huge energy potential, Africa’s energy production remains very low with lack of financial, technical and institutional capacities often cited as the main culprits.  
“The biggest tumbling block [for access to energy] has been the paralyzing and paternalistic ideology with the role of the state which has seized many of our development partners,” Hailemariam said.
He added that the private sector has not shown much interest to invest in power sector in Africa due to large perceived risks associated with long term private investment in Africa.

The premier said Ethiopia’s energy policy recognizes the important role the state can play in the development of the energy sector.
Spearheaded by the government, Ethiopia is undertaking huge power projects to generate electricity from hydro, geothermal and wind resources with the aim of reaching 10,000 megawatt of electricity by the end of 2015. Major among these mega power projects are the Grand Ethiopian Renaissance Dam, which aims to generate 6000 MW, and Gibe III, a 1840 MW power project expected to go operational in September this year.

Hailemariam said Ethiopia considers energy resources as catalyst for regional integration and its energy policy is not just focused on domestic consumption but also export.
The country, which already exports electricity to neighbors Sudan and Djibouti, have signed power purchasing agreements with Kenya and started installation of power transmission lines to its southern neighbor. According to the PM, the vision is to reach as far as Yemen and South Africa.

“It is our view that Africa’s natural resources ranging from water, oil and gas should bring us together and not feed civil and international conflicts,” the premier said.    
The private sector’s role in Ethiopia’s energy development endeavors are mainly limited to the engineering and construction aspects of the massive power projects. However, following U.S. President Barack Obama’s announcement of the ‘Power Africa’ initiative in June 2013, Ethiopia signed the first private sector investment in power project with the U.S.-Icelandic firm - Reykjavik Geothermal.

The 4 billion US dollars geothermal project, which aims to generate 1000 MW of electricity, is the single largest foreign direct investment for production of power in Ethiopia.
The US-Africa Energy Ministerial Conference, jointly hosted by the Ethiopian Government and the US Administration, aims to increase such kinds of energy business linkages between Africa and the U.S.

On the occasion, U.S. Secretary of Energy Dr. Ernest Moniz, also announced a new U.S. government initiative called ‘Beyond the Grid’. The initiative plans to commit one billion dollars in off-grid and small scale energy solutions on the African continent over the next five years partnering with 27 investors and practitioners.

The two day conference, being held under the theme of "Catalyzing Sustainable Energy Growth in Africa", has brought together 350 business leaders and government officials, including more than 30 African energy ministers.