The Executive Board of the World Bank Group has approved the launch of its Renewable Energy Guarantee Programme (REGREP) in Ethiopia. The project will generate 1,000 MW of electricity from renewable energy and private sector investment.
Like Egypt, South Africa and Kenya, Ethiopia is increasingly opening up the electricity sector to private investors. A draft law is currently under consideration, with the objective of encouraging independent power producers (IPPs) to invest in geothermal energy in Ethiopia.
Based on this reform commitment, the World Bank Group has approved the launch of its Renewable Energy Guarantee Programme (REGREP) in Ethiopia. The objective is to encourage PPIs to invest in renewable energy across the country.
REGREP aims to produce 1,000 MW of electricity from renewable energy sources such as solar and wind power. According to the World Bank, Ethiopia’s electricity mix is currently dominated by hydropower, a renewable but less secure source of energy, as hydropower production is declining due to declining river flows caused by the drought in eastern and southern Africa.
Until recently, the state-owned Ethiopian Electric Power (EEP) revived two turbines at the Tekezé hydroelectric power plant, which had been out of service for a long time due to the reduced flow of the Tekezé River. Diversification of the electricity mix is not only a necessity, but above all an emergency in a country that is accelerating its industrialisation.
Reaching out to PPIs
“With the support of the World Bank Group, the programme (REGREP) will create a platform for much-needed private sector participation in the crucial area of energy, reducing the risks associated with investment in Ethiopia (…) The programme has the potential to mobilise more than $1.5 billion in private investment,” says Carolyn Turk, World Bank Country Director for Ethiopia.
The World Bank plans to put in place a $200 million guarantee to support PPIs that will launch solar and wind projects under REGREP in Ethiopia. The World Bank’s support will be provided through its private sector branches, including the International Finance Corporation (IFC) and the International Development Association (IDA).
REGREP is not the only World Bank programme launched in Ethiopia to encourage PPIs to generate electricity from renewable energy. The “Scaling Solar” programme has also developed significantly in the country. In January 2019, the Ethiopian government issued a call for tenders for the development of six solar projects in the Afar, Somali, Oromia and Tigray regions, known for their very high levels of sunlight. All the projects will generate 798 MW of electricity with an investment of $795 million.
Jean Marie Takouleu