Ethiopia has secured a $400 million investment from UK government-backed investor Gridworks to expand its electricity transmission network, enhance renewable energy development, and improve access to power across the country. The agreements were signed during a visit by Britain’s Foreign Minister Yvette Cooper and mark a significant step in Ethiopia’s efforts to attract private investment into its energy sector.
Expanding Access and Regional Connectivity
The projects include connecting Ethiopia’s Somali region to the central and north-eastern power grids, an area that has historically lagged in electricity access. Additional initiatives will support the development of wind and solar power plants in the north-east and strengthen interconnections with neighbouring Djibouti, reinforcing Ethiopia’s ambition to become a regional energy hub.
Transmission Challenges Despite the Growing Generation
Despite the country’s growing electricity generation capacity, including power from the Grand Ethiopian Renaissance Dam (GERD), transmission limitations have hindered efficient delivery to industrial zones and remote communities. Nearly half of Ethiopian households remain off-grid, highlighting the urgent need for expanded and modernized transmission infrastructure.
Economic and Social Impact
British Ambassador to Ethiopia Darren Welch emphasized that “transmission infrastructure is fundamental to growth, jobs and improving lives,” while Ethiopia’s Finance Minister Ahmed Shide noted that the projects would boost industrial growth and accelerate electrification for millions of households.
UK Technical Support and Migration Context
In addition to financing, the UK has pledged £17.5 million ($23.9 million) in technical assistance to strengthen Ethiopia’s public investment systems and asset management frameworks, ensuring effective planning and execution of large-scale infrastructure projects. This initiative also aligns with UK efforts to address irregular migration, as improving economic opportunities in Ethiopia is expected to reduce the drivers of migration to Europe.
A Shift Toward Public-Private Partnerships
The Gridworks-backed projects represent Ethiopia’s first public-private partnerships in electricity transmission, signaling a shift toward private participation in critical infrastructure. By modernizing the power grid and expanding renewable energy, Ethiopia aims to sustain economic growth, create jobs, and strengthen its position as a regional energy leader, according to Business Insider Africa.
