Edited by

Mr. Mengistu Teferra

Executive Summary

Ethiopia has about 65 million people and encompasses 1.1 million km². The vast majority of its people (85%) reside in rural areas, deriving their livelihood from agriculture.  Ethiopia’s energy system is characterized mainly by biomass fuel supply, with households being the greatest energy consumers.  The household sector takes up nearly 90% of the total energy supplies.  Access to energy resources and technologies in rural Ethiopia is highly constrained.  Physical and economic access to biomass resources is deteriorating because the resources are exploited beyond their carrying capacity.  This results in higher household expenditures of labour, time or cash, while modern energy services are totally unavailable.  The energy infrastructure is underdeveloped because of the low-economic capacity of the government and other development agents and users.

Ethiopia has considerable energy resources, including hydro, solar, wind, geothermal, natural gas, but only its hydro resources have been exploited.  The following are some of the realities in the energy sector:

• Energy use is still based on biomass resources and its over-exploitation has had adverse environmental impacts.

• As an oil importer and a poor country, Ethiopia has to spend a significant proportion of its meagre foreign exchange earnings on petroleum imports.

The above environmental and economic problems have constrained the accelerated and sustainable development of the economy.  The Government issued the country’s first energy policy in 1994 to remove these and other constraints in the sector.

On 22^nd - 23^rd November, 2000, a national policy seminar was organised to enable both public and private sector agents involved in rural energy development exchange ideas and set sector development strategies and priorities.  A total of 50 participants attended the two-day seminar.  Participants included representatives from the various departments of the Federal Ministries of Mines and Energy, and Economic Development and Co-operation, Energy Bureaus of all 11 regions of the country, and the private sector.

Some of the pertinent conclusions and recommendations arrived at the seminar include the following:

1. The national energy policy document does not provide policy instruments.  These policy instruments should be prepared and implementing agencies and other stakeholders should participate in their preparation.

2. The Ethiopian Rural Energy Development and Promotion Centre in collaboration with regional energy bureaus and other stakeholders should prepare a sector development strategy and action program.  The Centre should present its programme within three months at a national energy seminar similar to this.

3. Priority should be given to the development of renewable technologies to minimize potential adverse environmental impacts.

4. A study should be initiated for the establishment of an Energy Fund to facilitate the financing of the energy sector development.  Concerted effort should be applied to induce financial institutions to give priority to financing energy sector developments.

5. Duties and taxes on imported renewable energy technologies should be reduced to encourage private sector investment in the sector.

6. A national energy database should be maintained and a system of information dissemination should be developed for easy and ready access by stakeholders.

7. The present energy supply and demand gaps cannot be addressed by government efforts alone.  Public-private partnerships should thus be promoted and strengthened for effective participation of the private sector.

8. Energy sector institutions should be strengthened with the necessary manpower, training, and logistical support.  Close working relationships should be maintained between Federal and Regional sector institutions.

9. The energy sector institutions should create an enabling environment for the participation of the population, particularly women; in the design, implementation and evaluation of energy programs and projects.

10. The scope of mandate of the Ethiopian Rural Energy Development and Promotion Centre should be upgraded to encompass the development and promotion of new and renewable energy technologies in addition to biomass resources.  The Centre should be strengthened with manpower and material resources to enable it to provide the required support to regional energy bureaus, the private sector, non-governmental organizations and other stakeholders.

The energy units in the regions should be upgraded to bureau level, so that they may be able to carry out their responsibilities successfully.

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