Dr. Arkebe Speech - Global Renewable Energy Industry Summit

Keynote Address by H.E Dr. Arkebe Oqubay Minister - Head of Economic Sectors’ Delivery and Support, Office of Prime Minister, Board Chairman of Ethiopia Industrial Parks Development (IPDC) At the Global Renewable Energy Industry Summit Wuxi, China - November 2017 Your Excellency, Mr. Wang Quan, Deputy Secretary of Wuxi Municipal Party Committee and Mayor of Wuxi, Honored Party and provincial officials, Distinguished CEOs, Excellencies and dignitaries, Invited Guests, Ladies and Gentlemen, It is my great pleasure and honor to be here in Wuxi on the occasion of the opening ceremony of the 2017 Global Renewable Energy Summit to discuss new frontiers and scenarios in the development and utilization of renewable energy resources. Thank you. Please allow me to seize this opportunity to spare few words on Ethiopia’s broader industrialization agenda, the critical role of energy resources and policies in this context, and Ethiopia’s potential as preferred investment destination in the renewable energy sector. In the past decade, Ethiopia has promoted structural transformation of the national economy and endorsed industrialization as a crucial pillar of its development policy. The Government’s overarching plan is to make the country the leading manufacturing hub in Africa by 2025; the goal is to create millions of new jobs in medium and large manufacturing. In this tune, the Ethiopian Government has implemented a continuum of policy and institutional measures – not only to facilitate our move towards rapid industrial development, but also to enhance the competitiveness of the national economy by working tirelessly on the provision of cost-competitive, clean and reliable energy and by creating a conducive environment for a fast- tracked development of our untapped renewable energy endowments. Your Excellency, Ladies and Gentlemen, We have long recognized that the sustainability of our economic development greatly hinges on fostering the deployment of renewable energy resources. As Ethiopia continues its unabated economic growth trajectory – averagely developing by 11% during each of the past ten years – and being recognized as one of the fastest expanding economies in the world in 2017 and one of the top five foreign direct investment destinations in Sub-Saharan Africa, we had vigorously braced to catch-up with the clean energy requirements of the myriads of investments – and simultaneously endeavored to promote, strengthen and streamline new foreign investments trekking in the renewable energy sector. We realize that the current national installed capacity of 4.3 Giga Watts of energy – nearly exclusively produced from hydropower sources – compares very little to the 60 Giga Watts of potential generating capacity we are endowed in renewables – such as hydroelectric, wind, solar and geothermal power resources. While this represents a long shot from an optimum setting of national energy services scenario, there is little doubt that such power development shortfall also presents enormous market opportunity for foreign direct investment in the sector. Under the Second Growth and Transportation Plan, Ethiopia has envisioned raising the overall national installed capacity to 17.2 GW of renewable energy by 2020 – whereas it is currently engaged in the construction of power infrastructures that anticipate generating only 6.3 GW of energy. Indeed, we are facing a long journey ahead and recognize that we should proactively promote and facilitate investment in the sector. Not least, we must cater for the immediate and pressing demands of industrialization today – including the provision of dedicated sub-stations to the stream of industrial parks now entering operational phases – and fulfil similar supply requirements prompted by the fast-pace of urbanization across the country and the electrification projects being implemented in rural towns and villages. Against such background, the Government of Ethiopia has, in the past few years, embarked on the task of refining and reformulating the national energy and investment policies. The Ethiopian National Energy Policy was adopted in 2013; complimented by the Climate Resilient Green Economy Strategy, the Policy accorded unwavering priority to renewable energy resources and set clear direction to position Ethiopia as regional hub for renewable energy development and cross-border trade. In tandem, the Government engaged in the rationalization of institutional and regulatory frameworks in the energy sector with a view to strengthening the sector’s governance system and making it more predictable, efficient and attractive to large-scale investments. The measures constituted part of a concerted national initiative that endeavoured to put in place clear policy and regulatory procedures normally required to prepare the ground for investment seeding in the energy sector. In consequence, today, private sector participation is not only allowed and highly encouraged for on-grid and off-grid power generation in Ethiopia – whether as independent power producers (IPPs) or in the form of Public-Private Partnership (PPPs), several reforms – some directly responding to investors’ policy related concerns – have also been implemented that substantially improved the investment climate in the sector. To name a few, sectoral investment procedures and opportunities have been clarified a great deal; fiscal and tariff based incentives are now better structured; fairly reputed off-takers – the Ethiopian Electric Power and Ethiopian Electric Utility – are reorganized; key legislative frameworks that govern PPPs and long-term Power Purchase Agreements (PPAs) – and hence provide investment security and market stability – are already tabled for adoption by the Government. These measured interventions have led to increased attraction in energy investments and enhanced the business climate that, hitherto, had hindered the involvement of IPPs in power generation projects. Today, we can confidently anticipate that by the end of the national planning period in 2020, private sector participation in the energy sector will fund about 75% of our planned targets – with investments worth USD 9 Billion – and develop about 4.5 GW of renewable energy. Ethiopia’s first ever major IPP, the Corbetti power generation scheme owned by Reykjavik Geothermal Co of Iceland, is already cleared for all ground procedures and will produce 300 MW of clean energy with an investment outlay of 1.2 Billion USD – as soon as the final PPA is signed in compliance with the newly adopted Geothermal Power Generation Guideline. The Ethiopian Electric Power has also signed preliminary agreements for two huge geothermal projects – the Abaya and Tulu Moye – which will be contracted for development by the same company – producing 500 MW each, while direct negotiations are underway with Omrat and Cluff – American and British geothermal companies for the development of five project sites. Similarly, the Government has already identified eight new hydro-power projects across major river basins in Ethiopia – waiting for private sector development. In closing, Ladies and Gentlemen, I wish to once again reiterate the huge opportunities of foreign direct investment availed in the energy generation sector in Ethiopia and take this occasion to extend highest assurances of the Government of Ethiopia to support investors in every way possible and create conducive environment for their operation. An era of abundant and cleaner energy lies ahead of us. Come and seize on this vast window of opportunity in Ethiopia. Thank You.