Missouri PSC and EEA staff gather during a partnership exchange on tariff setting in St. Louis, Missouri, August 2015
The Government of Ethiopia is striving to increase economic growth, expand electricity access and improve living conditions of its nation. In an effort to meet these goals, Ethiopia has established the Growth and Transformation Plan (GTP) under which they intend to unlock Ethiopia’s massive hydro and renewable energy sources to enhance key sectors that are currently challenged due to energy constraints. Ethiopia plans to increase generation capacity from 2,300 MW to 37,000 MW by 2037 and to be a leading exporter within the region.
Ethiopia’s government has made a commitment to attract private investment into the power sector to achieve the goals of the GTP. This includes tariff reform for full cost recovery and reducing inefficiencies in the sector. These changes are designed to increase private investment and address transmission and distribution needs to expand the power grid, enhance reliability and increase the flow of electricity.
The Ethiopia Energy Authority (EEA) will play an essential role to create an enabling environment for investment.
With support from the United States Agency for International Development (USAID) and Power Africa, the Ethiopia Energy Regulatory Partnership is working with the EEA to strengthen its institutional governance and capacity to oversee the energy sector and attract the necessary private investment. NARUC does this by improving the following:
The EEA is also a part of NARUC’s East Africa Regional Energy Regulatory Partnership. Its goal is to increase electricity trade between Tanzania, Kenya, Uganda, Kenya, Burundi, and Ethiopia through the harmonization and strengthening of regulatory frameworks. In order to trade across borders, domestic regulatory frameworks also must be strengthened.
EEA’s knowledge and skills were enhanced to implement the Tariff Guidelines and Methodology for the Electricity Sector in Ethiopia (TG&M), an initial step towards establishment of cost reflective tariffs.
Also, based on exchanges with NARUC, the EEA identified the need to update its draft Uniform System of Accounts (USoA) and to develop an implementation strategy using international best practices. The EEA plans to update its USoA and engage industry to identify consensus reforms as a direct result of practical information exchanged between the regulator and NARUC. This will also support NARUC’s regional effort to harmonize across the region to support cross border trade.
EEA has reassessed its internal structure and proposed to the government the inclusion of a customer handling team and measurement and verification (M&V) function.
Project Dates: 2014-Present
Ethiopia Energy Authority
Ethiopians Work To Lay Groundwork For Sound Electricity System
With USAID and NARUC support, regulators in Ethiopia are working with the country’s utilities to better understand the costs of operating the power system.
In-Depth Trainings Offer Critical Skills and Capacity to Regulators
With USAID and NARUC support, regulators in emerging economies are building knowledge and expertise through courses on regulatory fundamentals and best practices.