Ethio Resource Group (ERG), an Ethiopian off-grid local private energy company, has overcome the final hurdle to secure a license from the Ethiopian Energy Authority (EEA) to commercialise 9.5KW electric power.
The Company, which commissioned six wind turbines and micro-grid system farms at Menz Gera Midir Wereda, North Shoa Zone, in the Amhara Regional State, completed all the processes and is expecting to obtain the license within two months.
The Authority, the regulatory body of the power sector, has already published a notice on the Amharic state daily Addis Zemen on October 20, 2017, to the public for any objection before issuing the license.
ERG aims to sell electric power to households, small private businesses, schools and health centres in the area. The power supplied will be sufficient to electrify two lamps, operate audiovisual gadgets and recharge mobile phones.
This micro-grids farm is the first commercial private sector-owned and operated renewable energy business in the country. The state owns the other energy generators in the country and supplies the generated power to the national grid.
ERG, a grantee of the US African Development Foundation (USADF), fully commissioned its wind-powered mini-grid on March 31, 2017, and has been distributing power to the six villages under two Kebeles of the Wereda, for free.
With the generated power, the Company has benefited 300 households of the area after installing distribution lines. But it has not yet commercialised the power as the licence issuance was pending, and the government had not set a tariff for the sale of electrical power.
The existing electric power generation costs 0.09 dollars per kilowatt-hour (KWh), but it is distributed at 0.06 dollars per kWh with the government’s subsidy of the balance.
“We took a risk,” said Mesfin Shimeles, managing director of ERG. “Like any other infrastructure development, electric power development has risks as it requires a huge investment while its return is too low.”
The Authority has already set a tariff for the electric power, and the company is waiting for the green light to sign an agreement with the residents of the area.
“The tariff was made considering our expenses,” said Mesfin, but he refrained from disclosing the amount approved by the government.
ERG is a beneficiary of the Off-Grid Energy Challenge, by the USADF in partnership with Power Africa, USAID and General Electric. The Group had received a 100,000 dollars grant from USADF in 2014 to build six wind-powered micro-grid systems.
USADF has previously funded over 70 off-grid energy companies in nine African countries including ten private businesses from the power sector in Ethiopia.
The Company, established seven years ago, is engaged in consultancy and energy sector studies. So far, it has completed more than 50 renewable energy and environmental studies and projects in five African countries addressing about half a million people. It currently has 51 clients.
“ERG has changed lives in this community, and there is a potential to replicate this in other parts of the country,” Tom Coogan, USADF regional director, quoted on USAID’s website.
The Country has a potential of generating 1.3 million megawatts from wind, 45,000MW from hydropower, and 10,000MW from geothermal power. This farm will be the third in the country after the Ashegoda and Adama wind farms.
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