The government is tracing to come up with a new version approach on the power sector development with an open electric tariff against the current feed in tariff (FIT). The power sector reform needs more that USD 6.5 billion in the coming about five years to electrify major parts of the society from the current one third of power access on grid.
The power sector reform has revised the previous roadmap on the energy sector development, which is critical to assure other economic and social developments that the government tabled to meet by 2030.
To attain the goal for the national electrification program, the government has estimated USD 6.5 billion that will be filled from different sources.
One of that it is the public private partnership (PPP) scheme that the government has implemented in the past couple of years.
But one of the gaps to expand in the private sector involvement on the power generation is the tariff which was not attractive.
Frehiwot Woldehanna, State Minister of Water, Irrigation and Energy, said that there are activities under PPP on geothermal and solar.
“Meanwhile, there are few private companies investing on the sector but it needs to be boosted to reaffirm the ample power production,” he added.
“At the current stage the Independent Power Producers (IPPs) are getting under power purchase agreement on FIT that could not continue in the future,” he explained.
At the meeting with Natural Resource, Irrigation and Energy Standing Committee that was held a week ago, the State Minister said that under the reform the power purchasing scheme is considering introducing a market oriented rate for private generators.
“The reform is included and legal framework and other issues are under development that will be disclosed in the future,” he told the law makers.
Frehiwot told Capital that sometimes the private sector may be interested in short period return to its investment cost, but it will be seen how it will go onwards.
“We will do our best to attract the private sector to invest in the sector with different attractive mechanism,” he added.
The reform has two core components including expanding the on grid power coverage to 65 percent from the current 33 and cover the 35 percent from off grid.
The second component of the reform is to uplift electric service, which is very poor, to international standards.
The reform has given significant attention for debt burden relief on the energy sector that has about 380 billion birr loan.
A week ago the Council of Ministers have ratified a regulation for the formation of Liability and Asset Management Corporation to absorb the outstanding debt of the energy sector and other public enterprises like Sugar Corporation and Chemical Corporation, while the major share stood at the energy sector.
He told Capital that the reform has three major pillars; electrify all corners of the country, service quality, and expand the involvement of the private sector.
To attain the pillars skilled human capital development, financial strength, tariff adjustment, performance improvement and others will be applied.
According to the State Minister, the major problem is expected to be finalized in the coming years, while the financial accessibility has been stated as a crucial and probable challenge.
“It might not be secured at once, but it will be accessed in different mechanisms, in loan and support from different local and international development partners and sources,” he says, “the pace of accessing the finance will determine the performance tabled to achieve in the coming years.”
He said that the government is already working to accessing the finance from different sources.
The PPP is also considered as part of the financer that might share the cost, “The market oriented tariff approach is aiming this,” he elaborated.
In the coming ten year the power generation would be 20,000 MW that includes the contribution of the private sector.
ADELE
The government has proposed Access to Distributed Electrification and Lighting in Ethiopia Project (ADELE) to provide a synergetic package of investments to ensure that reliable electricity services are made available to all Ethiopians regardless of their location and economic status.
The proposed operation will support delivery of energy services with potential to enable productive use in peri-urban, rural, and deep-rural areas.
The delivery of energy services through off-grid solutions can support productive and income-generating activities in agriculture (i.e. irrigation, and processing) and commercial sectors, improving the livelihoods of fragile and vulnerable communities, and opening opportunities for women and youth, disproportionately affected by unemployment and lack of productive opportunities.
ADELE has five components including: network strengthening for improved reliability of supply in urban areas; solar-hybrid mini grids for rural economic development; solar home systems for households, small-holder farmers and small businesses; standalone solar systems for health and education facilities; and capacity building, technical assistance and implementation support.
The project aims at providing 1.45 million Tier 1 and above solar off-grid solutions, and isolated mini-grids.
Under providing access to electricity for households, businesses, and commercial and industrial users through solar-hybrid mini grids, it is estimated that the component will provide access to grid-level electricity to an estimated 240,000 households, and 11,500 businesses, commercial, and industrial users.
On the component solar home systems for households, small-holder farmers and small businesses will directly benefit approximately 750,000 households by providing access to off-grid energy solutions such as solar home systems and income-generating appliances. Out of these, around 120,000 systems will be used in support of small businesses getting access to electricity for lighting and productive uses.
The other plan is to benefit health and educations centers with access to sustainable and reliable electricity. It is expected that 400 health centers and 1,000 schools will be electrified through standalone solar systems.
The project will be implemented by the Development Bank of Ethiopia, Ministry of Water, Irrigation and Energy and EEU. Partners like the World Bank and others are expected to provide their support on electrifying those who will benefit to get power in this project.
ADELE is expected to consume over USD 600 million in the implementation period that is five year.
The recently issued document of the government indicated that the ADELE project implementation scope is widespread throughout Ethiopia including deep rural and underserved regions of the country.
Government sparks to switch to an open electric tariff
Attorney General initiates investigation on fertilizer saga
The has started its investigation on imported blending fertilizer based on the audit report of the Ministry of Agriculture. Government is also currently seeking to sell these blending fertilizers to other countries.
Minister of Agriculture, Oumer Hussein told Capital that the Ministry has done an audit and a report on the overall loss of the purchasing process of the blending fertilizer, “the Ministry of Agriculture has submitted its findings to the Attorney General to bring those who are accountable for the purchase of under standard blended fertilizer,” said Oumer stating that, “the purchasing process lacked clarity, which cost the country millions of birr.”
Suspected individuals related to the purchase bids and distribution of the faulty fertilizer were said to be accused for mismanagement of resources.
Regarding the issue Tesfaye Dahba, Deputy Attorney General told Capital that the federal Attorney General has started its investigation based on the findings of the Ministry of Agriculture. He has however declined to give further information since the case is under investigation.
It is to be recalled that five state-owned fertilizer blending factories was built at a total cost of 140 million birr in 2016 to revamp the industry. After building the blending factories the government has been importing zinc, boron and potassium. For this particular case, an import of 75,000 tons of boron fertilizer from Yara Switzerland for blending by these facilities was what grabbed the attention of government.
The aforementioned fertilizer shipment was found to be below the required standards for blending. The boron fertilizer from Yara was supposed to be granular but was found to be much smaller in size. Yet again, this fertilizer shipment, which was imported in 2014/15 and 2015/16, was distributed to fertilizer blending factories across the country.
However, these fertilizer shipments were a source of trouble to most of the blending factories as they were below the required standards and did not match with what was written on each bag as specification.
“These blending materials are not good for Ethiopian context,” said the Minister of Agriculture. “It therefore cannot be used as planned.”
Back in 2018, the government had decide to lift up the fertilizer blending and 15 factories which were damaged due to the imported substandard fertilizer to lease to the Morocco giant fertilizer company OCP which signed a 15 years lease agreement with Ethiopia to the renovation of the factories and was doing assessment of the factories.
According to the agreement, the group had agreed to make the factories operational and make the materials use and to be fully involved in the skill 
development of farmers.
Even if the group had agreed to make the factories operational until the end of 2018, however the Ministry of Agriculture said because of the over whelming asking price of OCP the government has stopped its deal with the OCP.
“Since it is a profitable company (OCP) we inquired for an additional offer but we couldn’t afford that. Currently we are deciding to sell the material to other countries,” explained Oumer. The Minister expressed that one of the benefit to selling the material was set to do away with rent cost since for more than 3 years it had stayed in stores costing in millions for rent, which was difficult to continue.
“When we become nationally strong we will start producing,” said the Minister.
On a burdensome unfolding, this mismatch had finally resulted in damaging the blending equipment of the factories managed under Gibe Dedessa Farmers’ Cooperative Union in Oromia Regional State, Merkeb Cooperative Union in Amhara Regional State, Enderta Farmers’ Cooperative Union in Tigray Regional State and Melek Site in Southern Regional State.
Officials from the OCP have declined to comment on the issue.
Paving the way: ERA’s first half fiscal year insight
Ethiopian Roads Authority has been successful in 80 percent of its plan for the first half of the current fiscal year 2020/21; to this end the authority was planning to oversee signage of around 33 road projects with contractors over the stated period.
According to Director General of the Ethiopian Roads Authority, Habtamu Tegegne (Eng), lack of inputs, instability in the country and right offs, have been challenges faced by the authority in its operation which has made it slightly impaired in achieving a hundred percent success.
As Habtamu said in the first six months of the current fiscal year, the authority has signed a contract for the construction of 21 road projects in different parts of the country with a total cost of 69 billion birr. On Wednesday February 3, 2021, the authority has signed agreements with various contractors for the construction of 8 roads with a total length of 738.19 km at a cost of 18.2 billion birr. Of the total cost, seven of the projects are covered by the government of Ethiopia. Out of the eight road construction projects, five of them are awarded to local construction companies as it stands.
According to the information obtained from the authority, 14 road projects were awarded to local contractors while the other 7 projects were taken by international contractors. 20 of the projects are financed by the government whereas the remaining will be covered by grants and loans from Japan International Cooperation Agency (JICA), African Development Bank, World Bank and some contribution from the Ethiopian Government. Among the road projects that connect to the neighboring country are; Andeslassie-Rama – Gerehu Senai to Eritrea, Durbete-Kunzla-Metema to S
udan and Negele Borena-Melkassu with Kenya and Somalia.
Currently, the authority has 253 projects, in which 187 of them are active projects. Until the end of the current fiscal year the authority is planning to undergo 117 road projects with approximately 500 billion birr. From these 117 projects, the authority has signed contract with local and international contractors for the construction of 21 road projects, while according to the director 13 new contracts are expected to soon be signed. Of the total projects, 67 of them have started the processes of auction to their construction, 8 are on auction review, 20 on the auction process, and 4 on the desi
gning phase and for 9 projects the authority is on process to hire designing advisors.
According to the director, the authority is preparing a new master plan to accelerate its operation, “The new master plan combined with new regulations and directives will crack the gap for the existing plan,” the engineer elaborated.
Ethiopia’s Covid-19 vaccine roll out plan
The Ministry of Health is preparing to receive the first batch of about 9 million doses of COVID 19 vaccine from the period of late February to April 2021. The government on its end is keen to vaccinate at least 20 percent of its population until the end of this year, 2021.
The country will receive the vaccine made by AstraZeneca PLC – a British–Swedish multinational pharmaceutical and Biopharmaceutical Company with its headquarters in Cambridge, England. The exact figure of the vaccine is 8,928,000 doses of AstraZeneca Covid-19 vaccine (AZ/SII vaccine).
For AZ/SII indicative distribution, delivery is estimated to begin as of late February, subject to WHO Emergency Use Listing Procedure /EUL/, manufacturing supply capacity and completion of pre-requisites, as outlined in the related caveats section. This is in line with the Facility targets to reach at least 3% population coverage in all countries in the first half of the year, enough to protect the most vulnerable groups such as health care workers.
In Ethiopia the vaccination roll out plan is set to be similar to that of other countries roll out initiative. The front runners set to receive the jab are: Health workers and elders more than 65 years. Ethiopia is meticulously planning to vaccinate 20 percent of its population against the COVID-19 pandemic by the end of 2021 as explained by the country’s top health expert.
On matters financing, the financial sources are set to include local and international donors, multilateral agencies, and the private sector that are merging their efforts alongside the government to combat the pandemic at its tracks.
Ethiopia has so far reported 139,408 infections with 2,122 deaths. Over the recent times number of new cases seems to be rising which is of great concern to the country in terms of dishing out the vaccine on time.
Furthermore, the Government in its efforts to rally out the pandemic is actively engaged in a unique global alliance representing more than two-thirds of the world. The alliance includes the World Health Organization (WHO), the Coalition for Epidemic Preparedness Innovations (CEPI), Global Alliance for Vaccines and Immunization (GAVI), the Gates Foundation, and 191 countries to raise financial support for accelerated research and development, production, and globally-equitable access to COVID-19 vaccines. Ethiopia is also part of COVAX AMC, a grouping of 92 low and middle income countries, seeking financial assistance to procure COVID-19 vaccines, accessories and help in delivery.
