Gov’t offering extensive fiscal, non-fiscal incentives for renewable energy

Addis Ababa, August 16, 2024 (FBC) – Ethiopia has been offering extensive fiscal and non-fiscal incentives for investments in renewable energy as it has identified the energy sector among the key priorities for investment, Chief Commissioner of Ethiopian Investment Commission Ms. Hanna Arayaselassie said.

The commission has held a half-day stakeholders meeting which focused on attracting finance and investment for the energy transition in Ethiopia.

Speaking on the occasion, the commissioner said the Ethiopia government has set a very ambitious goal in the energy sector development as part of the 10 Years Perspective Development Plan.

“We have set up for ourselves to reach universal electrification and to make Ethiopia a power of export hub, and to do this by quadrupling current power generation to about 20,000 MWs by 2030,” Hanna stated.

There are very ambitious goals towards which the Ethiopia government has set very detailed initiatives and projects to achieve this, it was pointed out.

This effort needs significant private sector investment, in addition to public investments that have been undertaken, especially in hydro power generation, most notably the Grand Ethiopian Renaissance Dam (GERD), she elaborated.

According to the commissioner, the Ethiopian government supports investments in renewable energy development through various policies and incentives as a key priority sector.

“We offer extensive fiscal and non-fiscal incentives for investments in the renewable energy sector. But to date, our success in attracting private sector investment has been modest. We have identified the energy sector as one of the key priorities for us in the fiscal year that we have just started, and in the years ahead.”

UNCTAD Regional Office for Africa Chief Diane Sayinzoga said UNCTAD recognizes the commitment of the Ethiopian government in promoting and facilitating investment in various sectors, including energy.

“This is part of an ongoing collaboration between UNCTAD and the Government of Ethiopia on a range of areas, including in investment and many other areas,” she stated.

Today’s meeting with stakeholders would enable us to identify opportunities and challenges to invest in the renewable energy sector in Ethiopia, according to the chief.

Senior Energy Advisor at the Ministry of Water and Energy, Gosaye Mengiste said Ethiopia is one of a few countries in the world that generates almost all its electricity from renewable energy.

With six years ongoing effort, the overall electricity access rate has increased from 44 percent to 54 percent. Still 46 percent of the population lacks access to electricity, he noted.

Therefore, creating investment friendly regulatory framework conditions is crucial to mobilize private capital in clean, low carbon energy, as well as to accelerate the flow of investment and finance in the country.

Gosaye pointed out that Ethiopia has established a Public Private Partnership proclamation whereby future large-scale renewable energy generation will be developed by the private sector, as reported by ENA.