Ethiopia has started exporting electricity to Djibouti two weeks ago, charging 70 dollar cents for a kilowatt hour (KWh), much higher than Ethiopia’s rates that are pegged at 0.065 dollar cents, Fortune has learnt. The move signals the possible start of Djibouti, which consumes an estimated 0.23 billion kilowatt hours of electricity, ending its dependence on diesel fuelled generators against a backdrop of spiraling fuel prices.
Over the past five years, the Ethiopian government has obtained close to 64 million dollars in grants from various sources to finance the transmission lines to Djibouti. This forms part of the country’s wider plans to fund the generation of electricity by exporting electric power to its neighbors, including Kenya and Sudan. The installation of power transmission lines that stretch to Djibouti and Southern Sudan have been completed. Ethiopia has an initial agreement to supply 200 MW to Djibouti, 200 MW to Sudan, and 500 MW to Kenya.
Projects interconnecting Ethiopia with Sudan and Kenya are being carried out with a multi-million dollar donation from the World Bank (WB). Ethiopia is expected to start exporting 100 GWh as early as the end of the month, which would earn the country an estimated 50 million dollars, according to documents Fortune has acquired.
The Ethiopia–Sudan Transmission Interconnection Project forms part of the Nile Basin Initiative (NBI), which is supported by the WB to improve the effectiveness of power systems in the Eastern Nile region. The NBI, a partnership between riparian countries, provides a framework for promoting cross border investments designed to generate benefits at the national and regional levels. The transmission line route is divided into three sections: Metema–Shehedi and Shehedi–Gonder have been completed, while Gonder–Bahir Dar is still underway.
Upon becoming operational, the 4.7 billion dollar Renaissance Hydropower Project on the Abay River near the Sudanese border will be the centre of Ethiopia’s power exports to north and eastern Africa. The mega dam will link Ethiopia’s hydropower plants to the 12 nation Southern Africa Power Pool through Tanzania.
Ethiopia currently has an annual power generation capacity of 2,000 MW and plans to boost its capacity by up to 8,000 MW, as envisioned in the GTP. If successful, huge investments in power plants could make electricity, rather than coffee, the nation’s chief export over the next 10 years.