Review of the National Electrification Program 2.0

Title

National Electrification Program 2.0

Integrated Planning for Universal Access

Date issued

2019, based on the electrification  plan in 2017

Introduction

National Electrification Program (NEP 2.0) focuses on integrated—grid and off-grid electricity access—and provides an implementation framework for the achievement of universal access to electricity which is only 44% in 2019. According to a study by the Ministry of Water Irrigation and Energy, the government organ leading the implementation of this project, 33% of the total population is connected to the national grid while 11% get access to electricity through off-grid facilities.

To achieve universal electrification the program presents an integrated sector-wide approach to electrification by increasing both capacities and reach of electrification.

With the implementation of the program, it targets to enable additional 8.2 Million new grid connections, and 6 Million off-grid connections through stand-alone solar solutions and mini-grids technologies by 2025.

Specific Goals

The goal of the program is to reach 100% access to electricity by 2025.

·         35% through off-grid

·         65% on-grid facility

Once 100% electrification is achieved the program progressively targeted to expand access to on-grid facilities replacing the off-grid facility.

·         78% by 2027

·         91% by 2029 and,

·         96% by 2030.

This is because an off-grid facility is not a sustainable solution for energy access.

The Approach

The on-grid access target beneficiaries are;

·         Households located within 2.5 km from the existing grid, corresponding to about 65 percent of the population, households to get access through direct lines by 2025.

·         Then the program plans to connect the  households found within the 5 Km range from the existing line (78% of the total household) by 2027 and,

·         Others who found within10 Km (91%) by 2029 and the rest within the 25 Km range by 2030.

Whereas 4% of the household will be addressed by the off-grid facility indefinably because they are very scattered in the third settlement pattern. 

Institutional Arrangement for Implementation

The Ministry of Water Irrigation and Energy (MoWIE) is the main responsible organ to implement this product. Under the ministry there are:

·         The National Electrification Plan Steering Committee

·         The Directorate of Electrification (DoE)

·         The Ethiopian Energy Authority

·         Regional Energy Bureaus

·         Financial institutions

·         Other government organs and,

·         Development partners

Finance

On-grid facility expansion alone will need more than 11 Billion USD by 2030 excluding the generation of electricity.

Furthermore, power generation will also need a large investment that hasn’t been estimated yet.

The off-grid facility on the other hand will need around 3.6 Billion USD investments to achieve the target by 2030.

It is estimated that on average a household that will be connected through the off-grid facility will need an investment of 300 USD and the government plan to cover it through loan facilities for the households through different financial institutions including the Development Bank of Ethiopia, MFIs, and other commercial banks.

To achieve the plan:

·         Revolving credit facility by the DBE Has been introduced,

·         Credit facility by MFI for households mainly for the purchase of solar panels and related equipment.

Actions Planned to be taken include;

·         Improving online payment tools for loan repayment,

·         Raise funding from donors to partially finance off-grid energy equipment  and distribution of solar equipment for the users,

·         Improve the after-sales support,

·         Making available forex for the import of solar panels and other equipment,

·         Support domestic manufacturing and others.

Focus areas

While working to achieve universal electrification special attention has been given  for

Public service institutions such as;

·         Schools

·         Health Facilities

The agriculture sector such as;

·         Solar Pumps

·         Poultry and animal husbandry

·          Running agro-industrial complex

Export Plan

The country plans to export more than 5000 MW of electricity to Djibouti, Somalia, Sudan, South Sudan, Tanzania, and Kenya by 2030.

Stakeholders

To achieve the target the collaboration of different stakeholders is important. The plan tried to manage the stakeholders which include;

MWIE and affiliate organs

Summary

Adequate, affordable, and reliable access (connectivity) to electricity is vital for enabling the structural transformation of Ethiopia’s economy and society, including further poverty reduction and a shift toward higher productivity rates and industrialization. The plan’s focus understood the urgency of the need for universal electrification and laid the way forward clearly. However, the plan is very ambitious given many challenges in the on-grid and off-grid expansion such as;

·         High cost and time required to generate energy which is shown in the delay of many hydro projects including GERD.

·         High cost of on-grid expansion and the dispersed nature of the settlement of the society

·         High forex demand by importers of off-grid power equipment.

·         The underdeveloped financial sector hinders access to credit to buy solar panels and equipment.

All in all, taking universal electrification as the main goal of the government as has been stated in the program is a good initial step by the government. However, the program should have achievable targets which put into account the country’s economic realities and the government’s implementation capacity.