In a significant move towards bolstering its renewable energy sector, the Ethiopian government has signed a Memorandum of Understanding [1] (MoU) with the African Trade Insurance Agency (ATIDI). This agreement aims to facilitate foreign investment in Ethiopia’s renewable energy projects through ATIDI’s Regional Liquidity Support Facility (RLSF), thus accelerating the country’s transition to clean energy.
The MoU, endorsed by the Ministry of Finance and Ethiopian Electric Power (EEP), outlines a collaborative framework between Ethiopia and ATIDI. The RLSF, developed by ATIDI in collaboration with KfW Development Bank and Norad, provides a liquidity support mechanism that ensures timely payments to Independent Power Producers (IPPs) or Public Private Partnerships (PPPs). This initiative addresses a critical challenge in Ethiopia’s energy sector—enhancing payment security and financial stability.
Manuel Moses, CEO of ATIDI, expressed his enthusiasm about the partnership, stating, “We are honored to collaborate with the Government of Ethiopia and Ethiopian Electric Power. This partnership aims to mitigate financial risks and attract more investment into Ethiopia’s renewable energy infrastructure. We believe that this collaboration will significantly contribute to Ethiopia’s renewable energy capacity and broader sustainable development goals across Africa.”
H.E. Ahmed Shide, Ethiopia’s Minister of Finance, highlighted the importance of the MoU, saying, “Through this partnership, we aim to ensure timely payments to developers, mitigate financial risks, and enhance the bankability of power purchase agreements (PPAs). These efforts will create a more attractive investment environment for renewable energy projects in Ethiopia.”
With this MoU, Ethiopia joins a growing list of ATIDI member states that have embraced the RLSF, including Benin, Burundi, Côte d’Ivoire, Ghana, Kenya, Madagascar, Malawi, Togo, Uganda, and Zambia. Since its launch, RLSF has approved guarantees worth USD24.7 million, facilitating investments totaling USD373.1 million and developing 181.95 MW of installed renewable energy capacity across Africa.
Ethiopia’s energy sector, primarily reliant on hydropower, is set to diversify its energy mix by leveraging the country’s vast renewable resources, including wind, solar, and geothermal energy. The Ethiopian government’s commitment to renewable energy is evident in this collaboration, which marks a significant step towards a resilient and investor-friendly energy landscape.
With ATIDI’s support, Ethiopia is expected to achieve its energy transition goals, ensuring financial stability and sustainability for its power sector stakeholders.
Sources:
[1] Ethiopia signs memorandum of understanding with ATIDI to support PPP renewable energy projects https://www.zawya.com/en/press-release/companies-news/ethiopia-signs-memorandum-of-understanding-with-atidi-to-support-ppp-renewable-energy-projects-hzqi6aar