Engaging the private sector Annual Event Abidjan, Côte D’Ivoire 3 – 5 October 2017 Financing LEDS implementation Engaging the private sector Tesfaye Hailu

Ethiopia – Country Profile Population – 100 M+ Grid connected – 31% Rural Scenario Rural Dwellers - 80% Grid Connected – 10% Lanterns – 16%

Ethiopia Energy – Current vs Planned Hydro - 13,817MW Wind - 1224MW 2025 2015 Solar – 300MW Geothermal – 577 MW Reserve Fuel - 509MW 4,180MW 17,208 MW Waste – 50 MW Sugar – 474 MW Biomass – 257MW

Renewable Energy Generation Plan in Ethiopia by 2025

Off-Grid Opportunities in Ethiopia – Targets set by 2020 Solar Lanterns – 3.6 M Highly commercial and private sector driven business. Government has been expressing strong demand for reliable suppliers Non-state actors foster strong engagement with private sector for solar systems for productive use in off-grid areas SHS - 400,000 High government support, large applicability, and strong attractiveness for private sector Support package prepared by the government’s off-grid investment plan to bring in as much private sector as possible Mini Grids – 3,600 High Government buy in off-grid government expansion plans – Schools, Health Centers, Irrigation Systems, Water Supply Systems, Telecom Towers

Trends - Rural Ethiopia – Energy Source

Ethiopia Energy – Potential vs Exploited Resource Unit Exploitable Reserve Exploited in 2015 Hydropower MW 45,000 <5% Solar/day kWh/m2 Avg. 5.5 <1% Wind GW 1,350 Geothermal 7000 Agricultural waste Million tons 15-20 30% Natural gas Billion m3 113 0%

The Energy Africa Compact A voluntary agreement signed between the Government of Ethiopia and the UK Coordinated support to accelerate the development of the household solar market in Ethiopia. Increased involvement of the private sector in the provision of Decentralised Renewable Energy through various models Outlines 11 policy action points to facilitate the implementation of the Energy Africa Compact

Key Areas Critical to Developing Off-Grid Solar Market Technology Financing crunches Investment Barriers Capacity Constraints The GoEs commitment to off-grid rural electrification does not match that of on-grid electrification. Lack of availability of long term grid expansion plans Unclear jurisdiction involving organizations in the business licensing, quality verification and taxation process Reliability of systems Customization to consumer requirements Finance for investment, operations and for consumers Tax reductions or removal for off-grid systems;

Key areas for improvement Sharing knowledge of the Government’s grid expansion Reduces the uncertainty preventing private sector to invest in a specific location Parallel formalization and streamlining of institutions and regulations involved in the import process Removes the hurdles behind the import barriers Adoption of third-party verifications through PVoC Reduces the capacity issues prevalent in the Standard Authority A “Green Line” declaration to fast track the custom clearance procedures Fast tracks Customs clearance – reducing payment for Provision of Tax-Free privileges for PVoC certified equipment's Entices the private sector to import reliable products Renders an opportunity to provide competitive off-grid products Creating incentives for local manufacture Tax free Holidays, tax free import of capital goods and equipment, reduces import barriers, job creation, and demand for hard currency Establishment of associations to build capacity amongst local investors Appropriate conformity standards to be defined in line with the local context Supporting affordable financing options Paygo models

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