Ethiopia's energy ambitions open path to growth and regional leadership, IEA finds

Ethiopia’s expanding electricity generation capacity, abundant renewable energy resources and growing role in regional power trade provide a strong foundation for economic development and energy security, according to a new Energy Policy Review by the International Energy Agency (IEA). The key findings were presented on 27 October by Syrine El Abed, IEA Africa Programme Manager, during the Energy Day of the Ethiopian Water and Energy Week, as outlined in a press release. The report calls for improved electricity reliability, expanded clean cooking access, diversified energy supplies and mobilized investment. It underscores the need to turn these strengths into reliable and affordable energy services. The review also emphasizes accelerating progress toward the country’s ambitious energy access targets.

Ethiopia’s energy sector is undergoing a major transformation, supported by large-scale infrastructure investments and a national development vision that places energy at the center of economic growth. The Grand Ethiopian Renaissance Dam (GERD) has significantly expanded generation capacity, strengthening the country’s potential as a regional electricity supplier. The national electricity access rate rose from around 12% in the early 2000s to approximately 35% in 2024. However, around 85 million people remain without access under the IEA’s basic service definition, with rural communities facing particular challenges. Achieving the targets of 75% access by 2030 and universal access by 2035 will require continued grid expansion and off-grid solutions.

Renewables accounted for around 90% of Ethiopia’s total energy supply in 2024, with bioenergy, the predominant fuel used for cooking, making up the majority of this share. Hydropower remains the backbone of electricity generation, while substantial solar, wind and geothermal resources offer opportunities to diversify the power mix. The review highlights the need to address financing constraints, infrastructure gaps and foreign exchange limitations to accelerate deployment of these technologies. Reliance on imported petroleum products also exposes the economy to international fuel market volatility. Strengthening regional electricity trade could improve energy security, support productivity and generate export revenues.

The review finds that around 120 million people in Ethiopia still relied on traditional cooking methods in 2024, making clean cooking one of the country’s most pressing energy challenges with an access rate at just 7%. Ethiopia aims to expand clean cooking access to 58% by 2030 and 76% by 2035, primarily through electric cooking and advanced biomass stoves. The report recommends addressing high upfront equipment costs through targeted financial support and consumer financing, while strengthening supply chains. Integrating clean cooking into power sector planning will be essential to anticipate additional electricity demand. High network losses and unreliable supply continue to constrain households, businesses and economic development.

Delivering Ethiopia’s energy ambitions will require greater investment from both public and private sources. Financing has so far been concentrated in public sector projects and grid-connected renewables, while clean cooking investment remains limited. The review recommends measures to improve project bankability, reduce investment risks and expand concessional and blended finance. Stronger energy data and more effective institutional coordination will also be critical to guiding investment and tracking progress. As host of COP32 in 2027, Ethiopia also has an opportunity to place the country and the continent at the center of the global conversation on energy and climate.