Energy Sector

An Expert's View about Energy in Ethiopia

Posted on: 17 Dec 2011

Ethiopia has abundant energy resources including hydropower, geothermal, wind and solar energy. It has recently started exporting electric power to Djibouti and plans to expand its exports into other neighbouring countries including Sudan, Kenya and Egypt.

Energy Sector in Ethiopia Ethiopia has abundant energy resources including hydropower, geothermal, wind and solar energy. It has recently started exporting electric power to Djibouti and plans to expand its exports into other neighbouring countries including Sudan, Kenya and Egypt. Market overview Ethiopia has the potential to generate 45,000 MW of hydropower, 5,000 MW of geothermal power and 1,000 MW of wind power. So far it has exploited only 2,000 MW of the estimated potential. Out of total electricity production, 98% is generated from hydropower while only 7MW is generated from Geothermal power. Located in the tropics, Ethiopia receives high solar energy with an average potential of 5.6 kilowatt per square meter. Oil & Gas: The sedimentary regions of Ethiopia cover a significant portion of the country and comprise six distinct sedimentary basins, namely the Ogaden, Blue Nile, Mekele, Gambella, Metema and Afar-Rift basins. Generally about 40% of the country is covered by sedimentary rocks of Permo- Triassic continental to deep marine sediments and Cretaceous rift sediments and these are prospective for petroleum resources. The resource potential of petroleum and other types of energy appears to be highly promising. Currently, there are 9 companies with 16 licenses engaged in oil and gas exploration in Ethiopia. The Calub and Hilala gas-condensate fields with respective reserves of 2.7 Tcf and 1.3 Tcf are under development for production with an outlay of USD 4billion private investment. Annual oil and gas imports stands at USD 1.8 billion in 2010. The size of the domestic market for lubricants is estimated at 48m litters per annum Key opportunities In the next 5 year (2010/11 ? 2014/15) Growth and Transformation Plan (GTP), the government plans to implement the following with an outlay of ETB 100 billion: ? Increase the current power generation capacity from 2000 MW to 10,000 MW; ? Construct 132,000 km new distribution lines; ? Rehabilitate 7680 km of old distribution lines; ? Increase the number of consumers with access to electricity from 2m to 4m; and ? The total underground power distribution system from 97 km to 150 km. Potential business opportunities for UK companies includes feasibility studies, supply of equipment and specialist consultancy especially in the areas of geology, tunnelling, finance and carbon finance, and social and environmental impact assessment for the construction of new hydropower plants, geothermal and wind power generation and building independent power generation capacity. Oil & Gas: Upstream: The number of blocks currently open to prospective private investors for oil and gas exploration include the following: ? Ogaden Basin ? 6 blocks ? Nile Basin ? 6 blocks ? Afar-Rift Basin ? 2 blocks Downstream: Lubricant import and distribution as well as fuel distribution businesses are open for foreign investment. Latest export opportunities ? Energy Latest export opportunities ? Ethiopia Getting into the market The Ethiopian government gives priority to companies coming with their own finance and in this case use direct negotiation to award projects. Public procurement is the main method used by the government to hire contractors when the project is financed by donors grant money, loan from multilateral agencies and the government?s own source of fund. Oil & Gas Upstream: If more than one company are bidding for the same area to get oil and gas exploration concession, concessions are awarded to those that have come up with the best financial and technical proposals. On the other hand, direct negotiation will be applied if only a single company applies to get concession of any particular area. Downstream: investors who wish to engage in lubricants import and distribution as well as fuel distribution business are required to have an investment permit from Ethiopian Investment Agency (EIA) and business license from the Ministry of Trade. More about doing business in Ethiopia Contacts Market intelligence is critical when doing business overseas, and UKTI can provide bespoke market research and support during overseas visits though our chargeable Overseas Market Introduction Service (OMIS). To commission research or for general advice about the market, get in touch with our specialists in country - or contact your local international trade team. ? Dessalegn Yigzaw, British Embassy Addis Ababa. Tel: 251 -11 661 2354 or email: dessalegn.yigzaw@fco.gov.uk. ? Hiriti Tesfalidet, British Embassy Addis Ababa. Tel: 251 -11 661 2354 or email: hiriti.tesfalidet@fco.gov.uk. Contact your local international trade team UKTI Events UKTI runs a range of events for exporters, including seminars in the UK, trade missions to overseas markets and support for attendance at overseas trade shows. Latest events ? Energy Major Events Industrialisation for Development and Transformation Date: 23 ? 29 February 2012 Website address: www.addischamber.com Useful links More about OMIS and other UKTI services for exporters
Posted: 17 December 2011

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