Ethiopian Electric Power (EEP) has revealed that ongoing and planned energy projects are facing severe operational bottlenecks due to complex compensation disputes. According to the state-owned utility, systemic legal and procedural gaps in compensation frameworks have resulted in billions of birr being tied up in costly legal battles and unverified claims, threatening national grid expansion.

Ashebir Balcha CEO of EEP, noted that the crisis affects both legacy infrastructure and new development initiatives. Currently, the utility is entangled in over seven billion birr worth of active compensation-related disputes and litigations. He attributed this massive financial drain to procedural loopholes, the submission of fraudulent information, and illicit third-party interventions that have routinely forced the institution to disburse unjustified compensation payments.

To address historical bottlenecks, the federal government enacted a revised Expropriation Proclamation (Proclamation No. 1336/2024) in July 2024, shifting the responsibility of property valuation and compensation payments for federal infrastructure projects to regional administrations. While designed to decentralize and streamline the process, the absence of clear implementation directives and insufficient institutional capacity at regional levels have exacerbated the challenge. Rather than resolving friction, the new framework has introduced administrative hurdles, slowing down the rollout of fresh electrification projects while legacy disputes remain unresolved.

Ashebir pointed out that energy infrastructure projects bear unique social pressures compared to other public works, such as road construction. While road networks provide immediate, tangible access and utility to local communities—thereby enhancing public acceptance—high-voltage transmission lines typically traverse residential rooftops and agricultural lands. Because affected communities rarely receive direct power access from the passing lines, translating compensation policies into on-the-ground cooperation remains exceptionally difficult.

Under Ethiopia’s land tenure system, all land is publicly owned and administered by the state, with private ownership restricted to improvements and buildings, while land use rights are legally protected. The government maintains the legal authority to expropriate land for public purposes, offering replacement land and monetary compensation. However, discrepancies in valuing communal grazing lands, traditional holdings, and seasonal properties have consistently triggered localized friction, community grievances, and protracted legal challenges.

Recognizing that current regulatory tools are proving unworkable, EEP has finalized a comprehensive internal assessment. The CEO stated that the findings and strategic recommendations have been prepared for presentation to the utility’s Board of Directors. Following board review, the proposals will be submitted to relevant government bodies to secure the structural policy interventions and legislative refinements necessary to achieve Ethiopia’s long-term energy access targets.