Ethiopia seeks $11bn from development partners for $18bn electrification plan

Ethiopia is seeking nearly $11bn from the World Bank and other development partners to finance an $18bn national electrification programme aimed at achieving universal electricity access by 2035.

The Ministry of Water and Energy expects external financiers to provide approximately 61% of the funding required under the third National Electrification Programme (NEP 3.0), unveiled on October 27 following 18 months of consultations, Capital reported on November 1.

Mesfin Dabi, the ministry's executive officer for electrification and energy information, said the programme aims to provide electricity access to approximately 32.5mn households by 2035. About 4.4mn households would receive power through off-grid systems, including solar installations, with most others relying on the national grid.

The government aims to increase the share of the population receiving at least basic Tier 1 electricity service to 75% by 2030, before achieving universal access in 2035. Private investors are expected to contribute approximately $800mn towards off-grid electrification, with additional funding potentially generated through carbon credits. The proposed financing has not been secured.

The ministry's NEP 3.0 final report estimates investment requirements of $18.1bn under its higher-growth scenario, including $16.2bn for grid connections and $1.86bn for off-grid systems. The estimates exclude additional investment needed for wider transmission and distribution network reinforcement and expanded generating capacity.

Ethiopia has substantial electricity-generating capacity, but inadequate distribution infrastructure and last-mile connections remain major obstacles to expanding domestic access. Its National Energy Compact calls for expanding distribution networks from 179,000 kilometres in 2025 to 456,000 kilometres by 2030, with $4.9bn identified as a financing requirement for distribution, connections and off-grid systems during 2026–2030. The compact covers a shorter planning period and a different scope from NEP 3.0, so the two funding requirements should not be added together. Ethiopia already exports electricity to Kenya despite persistent domestic access gaps.

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The National Energy Compact, prepared with World Bank support, found that 65% of households had access to some form of electricity in January 2025, but only 44% of the population received at least basic Tier 1 electricity service. The broader household-access measure includes connections that do not meet the minimum service standard used for the 2030 target.

World Bank senior energy specialist Nora Kipwala said the institution would continue supporting electrification alongside reforms covering tariffs, technical efficiency, affordability and institutional capacity. "The private sector shouldn't be an observer," she said, urging greater commercial participation in electricity access projects.

Mesfin said the World Bank had previously provided more than $1.6bn in concessional loans for electricity access. Ethiopia also participates in Mission 300, the joint World Bank and African Development Bank initiative seeking to connect 300mn people across sub-Saharan Africa to electricity by 2030.