Ethiopia is one of Africa’s fastest-growing economies and a rising hub for renewable energy development. With vast natural resources, expanding infrastructure, and strong government backing, the country is committed to becoming a major regional energy exporter.
Ethiopia generates most of its power from hydropower but is rapidly diversifying into solar and wind to meet rising demand. With industrialization, urban growth, and economic expansion, the government aims to boost power generation capacity, upgrade grid reliability, and attract global investors.
Ethiopia has one of the cleanest power grids in the world. Currently, Ethiopia has approximately 5,250 MW of installed generation capacity with plans to increase its power generation capacity to 17,000 MW in 10 years—both to serve its growing domestic demand and to export to other African countries.
For the past few years, the Government of Ethiopia (GOE) has been gradually increasing electricity access for its population by expanding its transmission network and encouraging power generation through public-private partnerships (PPPs) and power purchase agreements with independent power producers.
In February 2025, the Ethiopian government signed a Memorandum of Understanding (MoU) with the African Trade Insurance Agency (ATIDI) to attract foreign investment in renewable energy. The agreement aims to strengthen power purchase agreements and improve Ethiopian Electric Power's creditworthiness by using ATIDI’s Regional Liquidity Support Facility.
The MoU aims to support Independent Power Producers and Public-Private Partnerships by reducing financial risks. The MoU is part of Ethiopia’s strategy to diversify its hydropower-heavy energy mix with wind, solar, and geothermal sources, making the energy sector more resilient and investor-friendly.
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