Ethiopia sets new milestone for introducing cooperative mini-grids in rural areas

In a groundbreaking move for rural electrification in Africa, representatives from Ethiopia’s energy, cooperative, finance and private sectors set a milestone with the Green People’s Energy initiative to enable cooperatives to establish and run mini-grids. Guidelines are now available for developing cooperative-based mini-grid projects together with a financing concept and suggestions for filling remaining regulatory gaps.

When we started this initiative, our aim was to create more awareness about cooperative-led mini grids in Ethiopia. I believe we have taken a successful step towards achieving this goal,” says Sahele Tesfaye, Senior Advisor at the Ethiopian Federal Ministry of Water and Energy about the new guidelines.

Different experiences in different countries are eye-opening for stakeholders working in Ethiopia. With these guidelines, we have a sense of ownership for all involved in rolling out cooperative-mini grids

Alem Gebru, founder and general manager of Modify Electromechanical Systems and Solutions PLC, and member Ethiopian Solar Energy Development Association

Several options for owning, managing and running mini-grids are now on the table, allowing for different constellations of cooperative-private-sector partnerships in tandem with a solely cooperative-led model. “Different experiences in different countries are eye-opening for stakeholders working in Ethiopia. With these guidelines, we have a sense of ownership for all involved in rolling out cooperative-mini grids”, confirms Mrs. Alem Gebru, founder and general manager of leading solar company Modify Electromechanical Systems and Solutions PLC and member of the Ethiopian Solar Energy Development Association (ESEDA).

The guidelines have borrowed from best practices in other countries and incorporated the context and history specific to Ethiopia’s cooperative- and energy sector. Key stakeholders will test the developed management and financing models . International funding has recently committed to tendering and developing over 200 mini-grid sites in Ethiopia. Or, as a representative from the Ethiopian Federal Ministry of Finance, puts it, “Our ministry is working closely with the World Bank on the Ethiopian electrification project. We appreciate the effort that is being put into this project because it will reach remote areas that are difficult to electrify. These guidelines will also help with generating co-funding for these types of project in future.