Hauwa Ali
On the sidelines of the
Abu Dhabi
Sustainability Week
which ended on
Thursday 19 January
2023 in the United Arab
Emirates, UAE-based
independent power
producer (IPP) Masdar
signed a joint
development
agreement (JDA) with
Ethiopia Investment
Holdings (EIH), one of
the largest sovereign
wealth funds on the
African continent with
more than $150 billion
of assets under
management.
The partnership
concerns the
development of a
project to build two
500 MWp solar parks in
Ethiopia. The co-
development
agreement was signed
in the UAE capital Abu
Dhabi in the presence
of Ethiopian
authorities, including
Prime Minister Abiy
Ahmed. “Happy to see
the signing of a JDA
between the Ethiopian
government and
Masdar to develop two
solar photovoltaic
power plants,” the
Ethiopian chief
executive said on his
Twitter account.
Masdar signed the first
agreement for the 500
MWp solar project in
March 2021. At the
time, the Ethiopian
state-owned company
made a commitment to
the Ethiopian Finance
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Minister to develop,
finance and provide
design, engineering,
procurement,
construction, testing,
commissioning,
insurance, operation
and maintenance of the
solar PV plants. The
UAE company will also
build transmission
infrastructure.
The electricity
generated will be sold
to the state-owned
Ethiopian Electric
Power (EEP) under a
power purchase
agreement (PPA) that
has not yet been
signed. The concession
granted to Masdar and
its partner EIH is
expected to allow
Ethiopia to diversify its
electricity mix.
According to EEP data,
Ethiopia already has an
installed capacity of
4,898 MW, 90% of
which is hydro.
Hydropower capacity is
expected to increase
further in the coming
years with the gradual
commissioning of the
Grand Ethiopian
Renaissance Dam
(GERD). Its power plant
will be equipped with
16 Francis turbines
capable of delivering
6,450 MW of power.
This pronounced
dependence on
hydroelectricity does
not bode well in a local
context marked by the
resurgence of drought
episodes that reduce
the level of filling of
dams, and therefore
the production of
hydroelectric power
plants.
