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The Ethiopian Electric Utility (EEU) is embarking on a 25-year modernization initiative to transform its electricity distribution system into a digitally managed smart grid. This ambitious roadmap aims to enhance reliability, reduce outages, and prepare the network for rapidly increasing power demand in Addis Ababa.

Through its Smart Grid Transformation Program, slated for 2026–2035, EEU plans to evolve from a traditional utility into a modern, data-driven, and customer-focused power company. The utility’s goal is to achieve at least Level Three of the Smart Grid Maturity Model (SGMM) within ten years, a significant leap from its current Level One status.

This smart grid initiative is projected to require an investment of up to USD 640 million. It will introduce advanced digital technologies, real-time network monitoring, automated fault detection, improved customer services, and stronger grid management capabilities.

“The transformation is about creating a smarter, more resilient, and digitally integrated distribution network that can respond to increasing electricity demand and operational challenges,” stated EEU officials.

The Smart Grid Maturity Model is an international framework utilities use to measure progress in modernizing electricity networks. Level One signifies the early stages of smart grid development, characterized by exploration and pilot projects. In contrast, Level Three indicates that smart grid solutions are integrated across operations to enhance efficiency and performance.

As part of this transformation, EEU plans to deploy Advanced Metering Infrastructure (AMI), digital customer platforms, improved billing systems, and data-based decision-making tools. The utility will also introduce demand-side management programs, including time-of-use tariffs, demand response systems, electric vehicle integration, distributed energy resources, and microgrid development.

Key components of the smart grid roadmap also include cybersecurity enhancements, stronger telecommunications systems, and workforce development, as EEU prepares for a more complex energy sector.

The smart grid transformation is closely linked with EEU’s broader 25-year Electricity Distribution Master Plan, which aims for substantial improvements in electricity reliability, particularly in Addis Ababa.

Under the first phase of the master plan, EEU targets a 99.9 percent reliable electricity supply in the capital within four years. This short-term program requires an estimated USD 1.33 billion investment and will focus on upgrading overloaded feeders, expanding network capacity, improving redundancy, and strengthening distribution infrastructure.

“The primary objective of the short-term implementation is to establish a reliable electricity supply in Addis Ababa,” Chala Aman, project manager of the master plan, told Capital. “The city faces significant supply constraints, including frequent interruptions, unmet demand, and customers who remain without electricity access despite being located within the capital.”

He stated that a significant portion of Addis Ababa’s distribution network operates beyond its original design capacity, leading to frequent interruptions and hindering the utility’s ability to connect new customers.

“To achieve reliability, we must reduce the frequency of power interruptions. We will upgrade feeders to standard operating capacity,” Chala explained.

The broader 25-year distribution roadmap estimates that Ethiopia will need USD 30.6 billion to expand and modernize its electricity network by 2049. Electricity demand is projected to increase almost ninefold, from approximately 4,300 MW currently to about 39,327 MW.

The first phase of this plan involves constructing 16,500 kilometers of new medium-voltage distribution lines, rehabilitating 9,700 kilometers of existing lines, undertaking over 21,800 distribution transformer interventions, and installing an additional 6,945 MVA transformer capacity.

Addis Ababa is slated to receive the largest share of the initial investment, with USD 575 million allocated for upgrading the capital’s distribution network, while Oromia will receive approximately USD 478 million.

The master plan was developed after a detailed assessment of the existing network, which scrutinized around 1,100 medium-voltage feeders, 183 primary substations, and nearly 79,000 kilometers of mapped distribution lines.

The assessment revealed 271 feeders with unacceptable voltage levels and 182 feeders experiencing thermal overloading. Additional challenges identified included aging infrastructure, overloaded transformers, limited switching capacity, insufficient load transfer capability, and high technical losses.

The EEU anticipates that the modernization program will increase medium-voltage feeders from approximately 1,100 to over 1,400, improve the average minimum network voltage from 0.838 per unit to 0.925 per unit, and reduce active power losses by about 38 percent.

EEU Chief Executive Officer Getu Geremu commented that the master plan signifies a major stride toward modernizing Ethiopia’s electricity distribution system through digitalization, enhanced efficiency, and improved customer service.

The utility expects this roadmap to bolster Ethiopia’s industrial growth, urban expansion, and the National Electrification Program (NEP 3.0), which aims to achieve universal, reliable, and sustainable electricity access by 2035.

Beyond Borders: Why people keep leaving

Editorial

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August 8, 2026

The images have become painfully familiar: overcrowded boats drifting across the Mediterranean, exhausted migrants stranded at fortified borders, and grieving families waiting for news that too often never comes. After each tragedy, the response is predictable—calls for tighter border controls, tougher immigration laws and stronger enforcement.

But behind every headline lies a more uncomfortable truth: no wall, however high or technologically advanced, can eliminate the desperation that drives people from their homes.

The deaths of migrants attempting to reach Europe through Spain’s North African border are not isolated accidents. They are symptoms of a global system in which life chances continue to be shaped less by talent or determination than by the accident of birthplace. Where a person is born still determines access to quality education, decent employment, personal security and economic opportunity.

Few countries understand this reality better than Ethiopia.

For decades, thousands of Ethiopians have undertaken dangerous journeys along the Eastern Route through Djibouti and across the Red Sea to the Gulf. Others travel through Sudan, Libya and the Mediterranean in search of opportunities in Europe. Many never reach their destination. Some perish in deserts or at sea. Others fall into the hands of traffickers or endure exploitation that rarely receives sustained international attention.

These journeys are rarely driven by adventure. They are driven by economic hardship, insecurity and the desire for a more dignified future.

Ethiopia has undertaken important economic reforms and made progress toward modernization. Yet high youth unemployment, inflation, limited formal-sector job creation and the continuing effects of conflict, displacement and climate-related shocks continue to shape the choices of young people.

For many, the prospect of building a stable life at home appears increasingly uncertain. Insecurity—whether caused by conflict, local violence or anxiety about the future—reinforces the belief that remaining may be more dangerous than leaving. Migration therefore becomes more than an economic decision. It becomes a survival strategy.

The wider Horn of Africa context adds to these pressures. Djibouti, a major transit point for migrants and a critical trade hub, illustrates the difficult choices facing developing economies. Large infrastructure projects have stimulated growth, but they have also contributed to debt burdens and placed pressure on governments’ ability to expand social services and create sufficient employment.

Across the region, fiscal constraints limit the capacity of governments to meet the expectations of rapidly growing youth populations. Young people are told that the future belongs to them, yet many cannot find work, access affordable training or participate meaningfully in the formal economy.

Digital connectivity has also transformed expectations. Young Ethiopians can instantly see the educational opportunities, employment prospects and living standards available elsewhere. They are constantly exposed to images of a life that appears more secure and prosperous.

This creates a painful contradiction. The world encourages people to use legal channels to migrate, yet those channels are often narrow, expensive and difficult to access. Visa systems are restrictive, application procedures are lengthy, and lawful routes for study and employment remain limited.

When legal mobility becomes increasingly inaccessible, irregular migration becomes more attractive—not because it is safe, but because it appears to be the only option left.

Border management is legitimate and necessary. Every sovereign state has the right to secure its borders, regulate entry and combat human trafficking. But enforcement alone cannot solve what is fundamentally a crisis of inequality, insecurity and uneven development.

Stronger fences may redirect migration routes, but they rarely eliminate the forces driving migration. Instead, they often increase the power and profits of smugglers while making journeys more dangerous. When official routes close, migrants do not necessarily stop moving. They are pushed into more remote deserts, more dangerous seas and more exploitative arrangements.

A policy based almost entirely on deterrence risks treating migrants as the problem rather than recognizing the conditions that compel them to leave.

The question should not simply be: How do we stop people from crossing borders? It should also be: What has made leaving appear preferable to staying?

For Ethiopia, the long-term response must begin at home. The country needs sustained job creation, particularly in sectors capable of absorbing its growing youth population. Manufacturing, agriculture, digital services, tourism, logistics and renewable energy can all create employment if supported by stable policies, infrastructure and access to finance.

Entrepreneurship should also be treated as an economic strategy rather than a slogan. Young people need more than motivational speeches. They need affordable credit, reliable electricity, practical business training, predictable regulation and access to markets.

Vocational education must be linked directly to employment opportunities. Training young people for jobs that do not exist only deepens frustration. Technical colleges, employers and government institutions should work together to identify skills shortages and build programs that lead to real careers.

None of these measures will succeed without peace and accountable governance. Conflict destroys livelihoods, displaces families and diverts public resources away from development. It also creates the fear and uncertainty that make migration appear to be the safest available choice.

A young person who cannot predict whether a business will remain open, whether a job will survive or whether their community will remain secure will naturally look beyond the country’s borders.

Ethiopia cannot confront this challenge alone. Wealthier countries that benefit from global trade, international labour and the movement of capital also have a responsibility to address the inequalities that fuel irregular migration.

Expanding legal labour mobility would be more effective than simply telling people to stay home. Seasonal work programs, transparent recruitment systems, student pathways and skills-based migration agreements could provide safer alternatives to smugglers.

Fairer trade and productive investment are equally important. Development assistance should focus not only on emergency relief but also on supporting industries, local businesses, infrastructure and institutions that create sustainable livelihoods.

The international community must also examine the way migration policies are designed. It is contradictory to demand that people migrate legally while steadily narrowing the legal routes available to them.

Migration debates often focus on fences, visas, patrols and deportations. These measures address visible symptoms, but not the causes.

As long as opportunity, security and hope remain so unevenly distributed across the world, people will continue to risk their lives in pursuit of a better future. No government can enforce away the desire for dignity.

The real challenge is not how high borders can be built, but how effectively governments can expand opportunity and security on both sides of them.

People leave when home no longer offers a credible future. The most effective migration policy, therefore, is not simply to make departure more difficult. It is to make staying more possible, more secure and more worthwhile.

Djibouti rejects unilateral taxation proposal for Bab el Mandeb Strait

Capital News

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August 8, 2026

Djibouti rejects unilateral taxation proposal for Bab el Mandeb Strait

Djibouti has firmly rejected any attempt to impose unilateral taxes or transit fees on vessels passing through the Bab el Mandeb Strait, warning that such a move would violate international law and threaten one of the world’s most important maritime routes.

In a statement issued Wednesday evening, the government said it opposes any effort by a single party to levy charges on ships using the strategic waterway, which is shared between the Horn of Africa and Yemen’s western coast.

The statement followed reports earlier in the day suggesting that Yemen’s Houthi movement was considering introducing transit fees for vessels navigating the Bab el Mandeb Strait. The narrow passage connects the Red Sea to the Gulf of Aden and the Indian Ocean and serves as a critical gateway for global trade and energy shipments.

Djibouti said it remains fully committed to the principle of freedom of navigation and to the international legal framework governing straits used for international navigation under the law of the sea.

“The Bab el Mandeb Strait is a maritime passage of global interest, shared between the African and Asian shores. Any initiative seeking to impose, from a single shore, a toll or taxation system on ships transiting through this strait would be contrary to international law, would undermine the sovereignty of the riparian States, and would threaten the security of maritime routes essential to global trade and energy supply,” the statement said.

As a riparian state bordering the strait, Djibouti said any such measure would amount to a unilateral challenge to the international status of the waterway and would further heighten tensions in an already fragile region.

The government added that it reserves the right to pursue diplomatic, legal and security measures—either independently or in coordination with regional and international partners—to safeguard its sovereign rights, protect freedom of navigation and preserve stability in the Red Sea.

Djibouti also called on the international community, relevant international organizations and countries that rely on the strait to ensure the Bab el Mandeb remains a safe and open maritime corridor governed by international law, rather than becoming a tool for advancing particular interests.

The Bab el Mandeb Strait is one of the world’s busiest shipping lanes, carrying a substantial share of international trade and energy supplies between Europe, Asia and the Middle East.

According to experts for Ethiopia, the issue carries particular significance. As a landlocked country, it depends overwhelmingly on Djibouti’s ports and the uninterrupted flow of cargo through the Red Sea corridor for its international trade.

EEU Pulls in Over $13M in Foreign Currency, Expands Access and Exports

Capital News

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August 8, 2026

EEU Pulls in Over $13M in Foreign Currency, Expands Access and Exports

The state-owned Ethiopian Electric Utility (EEU) announced it has collected USD 13.4 million in foreign currency over the concluded fiscal year, propelled by international electricity sales and payments from high-voltage industrial clients.

Presenting the annual performance report, EEU CEO Getu Geremmew highlighted a strong financial year, noting that energy-sales revenue reached 76.53 billion Birr against a target of 75.17 billion Birr.

“This achievement represents a performance rate of 101.8 percent and marks a 74.3 percent increase compared to the previous fiscal year,” CEO Getu stated, adding that the figures incorporate export earnings and foreign currency tariffs from seven high-voltage industrial consumers.

In an effort to expand energy access, EEU successfully electrified 26 remote rural kebeles and towns—previously lacking grid connectivity—through off-grid solar energy solutions.
During the fiscal year, overall 205 rural kebeles and villages gained electricity access for the first time this fiscal year—a 32.3% increase from the 155 areas reached the previous year—bringing the cumulative total of electrified rural towns and villages to 7,908.

EEU reporterd that, it had planned to connect 800,000 new customers, successfully linking 664,505 households to the grid to achieve an 83.1% performance rate. This milestone marks a 32.5% increase—adding 162,917 more customers—over the corresponding period last year. Of the new connections, 56.8% received postpaid meters and 43.2% received prepaid meters, lifting EEU’s total customer base past the 5.88 million mark.

Previously, in the 2024/25 fiscal year, the EEU collected a total revenue of 63.12 billion Birr, with 43.9 billion Birr generated directly from electricity sales. During that preceding period, the utility purchased 15,000 gigawatt-hours (GWh) of electricity from Ethiopian Electric Power (EEP), successfully delivering 97.7% of that supply to consumers and achieving a collection efficiency of 96.7%.

To satisfy growing domestic and international demand, EEU planned to purchase 18,323 gigawatt-hours (GWh) of bulk power from EEP. “The utility successfully procured and distributed 18,319 GWh, achieving a 100.5% performance rate as overall power demand grew by 15.5% year-on-year” the CEO stated.

According to the report, EEU supplied 497 GWh out of its 500 GWh export target to Kenya, marking a 99% performance rate. Facilitated through the Ethiopia-Kenya 500 kV HVDC converter station—a USD 1.26 billion transmission line spanning 1,060 kilometers with a 2,000 MW capacity, primarily financed by the World Bank and African Development Bank—EEU currently supplies 265 megawatts (MW) of electricity daily to Kenya under a bilateral power purchase agreement.

Kenya has significantly escalated its power imports from Ethiopia, reaching 1,274.42 GWh by June 2025. This surge is largely driven by cost efficiency: Nairobi has increasingly favored Ethiopia’s competitively priced hydropower—costing roughly USD 0.066 per kilowatt-hour—over thermal power alternatives that can soar up to USD 0.23 per kilowatt-hour.

Meanwhile, revenue generated from new customer connection services reached 39.23 billion Birr, surpassing the 37.74 billion Birr target for a 103.9% performance rate.

Out of total power sales revenues, EEU disbursed 48.42 billion Birr to EEP for bulk energy procurement. Standard operational expenditures stood at 19.59 billion Birr, or 87.4% of the targeted 22.42 billion Birr. Notably, the utility fully covered 100% of its regular budgetary expenditures using internal revenues.

Getu emphasized that, the utility capital expenditure utilization reached 65.58 billion Birr (71% of the 92.25 billion Birr target), reflecting a 38.5% year-on-year increase. Combined standard and capital expenditures totaled 133.59 billion Birr, financed primarily through internal revenues (80.6%), government allocations (2%), foreign grants (16.2%), and foreign loans (1.2%).