international

Africa/Middle East: Ethiopia

Ethiopia Energy Regulatory Partnership:
Creating an Enabling Environment for Private Investment

Missouri PSC and EEA staff gather during a partnership exchange on tariff setting in St. Louis, Missouri, August 2015

The Energy Sector

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.

 

Our Work

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:

  • Regulatory Frameworks: enhancing practical knowledge on tariff setting, consumer protection and education, stakeholder engagement, and monitoring and enforcement.
  • Legal Frameworks: development and/or review of guidelines, standards, studies, draft regulations, draft laws, and power purchase agreements (PPA).
  • Technical Frameworks: development and/or review of grid codes, interconnection codes, and resource management plans.

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.

 

Selected Results

Tariffs
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.

Public Engagement
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.

At A Glance

Project Dates: 2014-Present

Primary Partners:
Ethiopia Energy Authority

Contact Us About This Project

Activities

Gap Analysis
February 21 - 24, 2017

Partnership Exchange: Mapping the National Uniform System of Accounts
December 6 - 8, 2016

Technical Workshop on Uniform System of Accounts and Financial Data Collection Template
August 15 - 18, 2016

Exchange on Enhancing Financial Instruments, Uniform System of Accounts and Financial Data Collection Template
June 1 - 3, 2016

Training on Cost-Reflective Tariffs
February 23 - 26, 2016

Partnership Exchange on Tariffs and Accounting Principles
August 17 - 21, 2015

Energy Regulators Regional Association (ERRA) Training Course on Price Regulation & Tariffs
May 11 - 15, 2015

Peer Review on Tariff Guidelines and Methodologies for Ethiopia’s Electricity Sector
April 21 - 23, 2015

Partnership Exchange on Energy Efficiency and Tariff Methodologies
December 8 - 12, 2014