Ethiopia has the potential to generate 45,000MW of electricity from hydropower per year however, it is currently generating a fraction of that at around 2000MW. At the end of 2015, the government plans to increase the present generating capacity from 8,000 to 10,000MW. The government’s strategy involves massive exploitation of the potential of hydropower offered by the country’s extensive network of rivers. The goal is to increase existing capacity by a factor of 15 by 2020, enabling export to neighboring countries as well as domestic coverage.
Currently, the Ethiopian government is undertaking construction of a few major hydropower plants including the giant Gibe III dam on the River Omo - one of Africa’s major infrastructure projects with a capacity to generate about 2,000MW of electricity. Furthermore, the Government recently commenced its biggest project to date, the 5,000MW Grand Renaissance Dam on the Nile River, which upon completion will rank as the 10th largest dam in the world.
Despite these mega projects being undertaken by the government of Ethiopia, significant opportunity remains to undertake small and micro hydro projects – including domestic, rural and mini-grid use - by private operators in the hundreds of small river basins crisscrossing the Ethiopian highlands. This resource harbors significant potential to power Ethiopia’s rural and off-grid economic activity.