In order to meet the rising demand of electricity, Ethiopia has continued cultivating its immense potential of renewable energy sources such as hydro power, wind, solar energy and geothermal energy. The nation is the source of several river basins that are helpful to develop electric power- clean power generation. For instance, the Nile, the longest river in the world, gets about 85 per cent of its waters from the Blue Nile which originates from Ethiopia. There are also huge potentials of non-renewable energy resources such as natural gas and coal energy in the nation.
The increasing demand of power to commensurate economic growth the country has been pursuing necessitates high investment in the energy sector. Hence, the nation has been working aggressively to increase the power supply reliability and generate foreign currency. It has set the target to reach the generation capacity 17, 208 MW at the end of the second Growth Transformation Plan (GTP-II).
As the journey to this target, 4,828 MW from hydro power, 324 MW from wind power, 50 MW from urban solid wastes, 252 MW from sugar factories, 7 MW from geothermal energy, 120 MW from biomass and 87 MW emergency generation, in total 5,670 MW generation capacity was planned at the end of 2008 E.C. The construction of Grand Ethiopian Renaissance Dam that is expected to generate 6,450 MW has reached over 58 per cent. Moreover, more than 16,000 km high voltage transmission lines have been stretched. The lines that are under construction will be stretched to reach 27,000 km at the end of GTP II.
Ethiopia has planned to be one of the middle income countries by 2025. Hence, to achieve this goal, the country has focused on industry-led economic development. It also identified that the key instrument to realize its vision is to expand its energy development strategy. In the journey from water tower to water power, Ethiopia offers a great deal of opportunity for clean energy production which has become vital in the current global environment. It creates a new investment opportunity with high returns.
Beyond satisfying its energy needs, the country is currently working to export electricity to neighbouring countries which is executed on the basis of the master plan, a 2,000km line that connects Ethiopia-Kenya-South Sudan-Rwanda. Ethiopia has connected its power grid with Sudan, Kenya and Djibouti and currently exporting 195 MW of electricity to the three neighbouring countries. The potential of the sector has created huge opportunities for the country to export electricity to neighbouring countries and boost regional integration. "Ethiopia is becoming a major producer of hydroelectricity, and the strategy of integration includes the interconnection of neighbouring electricity networks," stated Robert Wiren, a French journalist who dealt with issues in the Horn of Africa.
Explaining the necessity of universal access to modern energy for Africa, Kofi Annan who served as the seventh Secretary-General of the United Nations said, "In several countries, including Ethiopia, Kenya, Morocco and South Africa, renewable energy makes up an increasingly important share of national power generation. There are also a number of promising initiatives aimed at providing electricity across borders, mostly drawing on renewable resources such as solar, wind and hydro power. We now need to see more of them deployed at far greater scale to bring power and light to Africans who still lack modern energy."