Abstract
Ethiopia faces chronic power problems including insufficient generation capacity, low connectivity and poor reliability of transmission and distribution all of which constrain development. The Ethiopian power sector reform is necessitated by poor technical and financial performance of the power sector. The reform was initiated during 1997 just like any other Africa country due to deregulation of the power sector market in the world which aimed to increase the technical and financial performance of the sector. The government initiative to reform the power sector was backed by world bank by transforming Ethiopia Electric Light and Power Authority (EELPA) into Ethiopia Electric Corporation (EEPCO) in order to give the utility to work in business mind rather than as simple service sector. The main reason for powers sector reform is inability of state own vertically integrated utility to mobilize sufficient capital for the electricity sector development and expansion and waiting of federal government yearly allocated budget to perform its planned tasks. It is found that as most sub Saharan African countries including Ethiopia is in its initial steps of power sector reform even though there are some work done regarding corporatization, electricity amendment, management contract and tariff setting for independent power producers. The reform resulted in significant progress in connectivity and creating independent regulatory agency but failed to bring unbundling, encompassing independent power producers and improving transmission and distribution reliability. This article is based on country study by the author reviewing the status of power sector reform with special emphases on the success, gaps and challenges of the sector. The result of this study shows that power sector reform in Ethiopia has mixed result that gaps and challenges override the success due to weak institutional structure, weak project management and low skill capacity of human resources to implement the reform as intended, government inability to finance the reform process and the country still position itself at level-2 out of level-5 of maturity level of power sector reform.
Highlights
Ethiopia, found in east Africa with 1.1million km2 area and a population of around 90 million, is endowed with enormous natural resources which help to generate electricity
In 1941 the first electric power utility called ' Shewa Electric power ' was established and later on the utility renamed as Ethiopia Electric Light and Power Authority (EELPA) in the year 1955 which was vertically integrated monopoly with a generation capacity of35 GWh and led by Board of Director appointed by government to engage in the business of generation, transmission, distribution and sale of electric energy to the public [1]
In order to accommodate the new change in the power sector environment around the world, the power sector reform, which was initiated by world bank have been implemented in 1997 by transforming and renaming EELPA into the Ethiopian Electric Power Corporation (EEPCO) by reorganizing its function on the basis of the principle of commercialization and decentralization for an indefinite duration
Summary
Found in east Africa with 1.1million km area and a population of around 90 million, is endowed with enormous natural resources which help to generate electricity. In 1941 the first electric power utility called ' Shewa Electric power ' was established and later on the utility renamed as Ethiopia Electric Light and Power Authority (EELPA) in the year 1955 which was vertically integrated monopoly with a generation capacity of GWh and led by Board of Director appointed by government to engage in the business of generation, transmission, distribution and sale of electric energy to the public [1]. The majority of population live-in rural area does not have enough access to modern energy such as electricity which leads to poor quality of life, under developed economy which resulted in high migration of rural youth to urban areas. The consumption of modern energy in the country is still very low in spite of the growth of respective national economies. This is demonstrated by very low levels of electricity consumption around 120kWh per capita
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