On January 25, 2025, the air in Addis Ababa was electric—not just with the hum of daily life, but with a shared sense of purpose. Inside our vibrant gathering space, a diverse group of experts, policymakers, and stakeholders had gathered for Ethiopia’s Second Energy-Sector Reform Workshop. The mission? To reimagine and reshape Ethiopia’s energy future, turning it into a model of sustainability, efficiency, and inclusivity.
The challenges ahead were no secret. For years, Ethiopia’s energy sector has struggled with outdated infrastructure, financial losses, and uneven service delivery. These issues have left many communities in the dark, both literally and figuratively. But on this day, the mood was anything but gloomy. There was a palpable sense of hope, a collective determination to turn obstacles into opportunities.
Below I share my thoughts and four key points from our discussions on reshaping the future:
Energy for everyone
The vision was clear: to create an energy system that works for everyone. Ethiopia is not just looking to keep the lights on—it’s aiming to become a regional powerhouse. With its abundant renewable energy resources, the country has the potential to be a major player in the East Africa Power Pool, exporting clean energy to its neighbors. But to get there, reforms are essential.
Ensuring the financial health of Ethiopia’s utilities is key. This means finding ways to attract both public and private investment, modernize infrastructure, and bring down costs. Imagine a future where Ethiopia’s competitively priced electricity fuels homes and businesses, and also a growing fleet of electric vehicles, driving the country toward a greener, more sustainable future. With the right changes to incentivize private investment in generation capacity, this indeed can be reality.
Bold Steps Forward
The government has already taken significant steps in the right direction. A new four-year tariff plan has been introduced to stabilize revenues, manage costs, and reduce debt. This is more than balancing the books—it’s about creating a foundation for long-term growth. With stronger finances, utilities can focus on investing in more infrastructure, improving service, reducing outages, and embracing digital tools to better manage the grid.
Addis Ababa, the vibrant heart of Ethiopia, is a focal point of these efforts. As the city grows, so does its energy demand. But the reforms aren’t just about the capital—they’re about bringing light to every corner of the country, to boost the economy, create jobs, and strengthen resilience. Rural areas, like Somali, South West, and Afar, still face significant electrification challenges. Bridging this gap is a top priority, ensuring that no community is left behind.
Building a Resilient Future
Energy security is another critical piece of the puzzle. Ethiopia is working to diversify its energy sources, modernize infrastructure, and prepare for the impacts of climate change. The goal is a resilient network that can reliably meet the nation’s needs, even in the face of climate change and system disruptions.
Private sector investment will be crucial. By creating clear incentives, strengthening regulations, and building local capacity, Ethiopia aims to attract the resources and expertise needed to drive progress.
A Journey Worth Taking
The road ahead won’t be easy, but the destination is worth it. By embracing bold reforms, fostering collaboration, and leveraging both public and private resources, Ethiopia is laying the groundwork for a brighter, more sustainable future.
As the workshop concluded, the sense of optimism was undeniable. The World Bank, alongside other partners, stands ready to support Ethiopia in this transformative journey. Together, we can unlock the full potential of Ethiopia’s energy sector—not just for today, but for generations to come.
The sun may have set on Addis Ababa that evening, but the light of possibility shone brighter than ever. Ethiopia’s energy future is being reimagined, and the world is watching.
Source: blogs.worldbank
