Ethiopia’s Ministry of Finance and Ethiopian Electric Power (EEP) has signed a Memorandum of Understanding (MoU) with the African Trade Insurance Agency (ATIDI) to accelerate Ethiopia’s transition to clean energy by attracting foreign investment into renewable energy projects, leveraging ATIDI’s Regional Liquidity Support Facility (RLSF).
The MoU establishes a framework for collaboration between Ethiopia and ATIDI, allowing Independent Power Producers (IPPs) and Public-Private Partnerships (PPPs) to benefit from RLSF.
This liquidity support mechanism, developed by ATIDI in partnership with KfW Development Bank and Norad, enhances financial security for IPPs and PPPs by ensuring timely payments from state-owned utilities – to address energy sector—payment delays—by improving financial stability and investor confidence.
“We are honored to work with the Government of Ethiopia and Ethiopian Electric Power to support the country’s renewable energy development. By mitigating financial risks through our liquidity support, we aim to attract more investment into Ethiopia’s energy infrastructure, helping to expand its renewable energy capacity and drive sustainable development across Africa,” said ATIDI CEO Manuel Moses.
Ethiopia’s Commitment to Energy Sector Reforms
“This collaboration ensures timely payments to developers, mitigates financial risks, strengthens the bankability of power purchase agreements (PPAs), and enhances EEP’s creditworthiness. These efforts will create a more attractive investment environment for renewable energy projects,” said Ethiopia’s Minister of Finance Ahmed Shide.
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Ethiopia joins a growing list of ATIDI member states benefiting from RLSF, including Benin, Burundi, Côte d’Ivoire, Ghana, Kenya, Madagascar, Malawi, Togo, Uganda, and Zambia.
Since its inception, RLSF has facilitated investments totaling $373.1 million, supporting the development of 181.95 MW of renewable energy capacity across Africa.
The partnership aligns with Ethiopia’s Homegrown Economic Reform Agenda (1&2), which seeks to address structural challenges and promote sustainable economic growth.
Key aspects of the reform include enhancing macroeconomic stability, improving the investment climate, and promoting trade.
“The RLSF will play a crucial role in enhancing the bankability of PPP projects, ensuring their sustainable implementation,” added Shide.
Ethiopia has historically relied on hydropower as the primary source of electricity but is now working to diversify its energy mix by utilizing its vast renewable resources, including wind, solar, and geothermal energy.
Beyond energy, the government’s reform efforts aim to drive productivity in key sectors such as agriculture, manufacturing, and services.
“Our goal is to create a favorable investment climate that attracts foreign direct investment across multiple sectors, and we look forward to expanding our collaboration with ATIDI beyond energy.”
