Policy Reforms in Energy Sector Enhance Private Sector Opportunities, Says State Minister

Addis Ababa, August 14, 2025 (FMC) – Ethiopia has strengthened the business environment for the private sector in the energy sector and beyond by opening up its economy and revising investment policies, Water and Energy State Minister Sultan Welle said.

Speaking at a panel discussion on Ethiopia’s solar energy organized by the Ministry of Water and Energy in collaboration with the International Solar Alliance, the State Minister highlighted the country’s abundant renewable energy potential.

“I can confidently say that all renewable energy sources available globally exist in Ethiopia, though their extent, locations, and generation capacity may vary,” he noted. He acknowledged that, despite this vast potential, the nation’s current power generation remains limited relative to its resources.

State Minister Welle emphasized Ethiopia’s ongoing national electrification program, aimed at fully electrifying the country using all alternative energy sources. The plan targets 65 percent of the population through the main grid, with the remaining relying on off-grid technologies.

“Just a few years ago, solar energy was mainly used for cooking and lighting, but today it goes far beyond that,” he said, stressing that solarization now encompasses productive uses as well. He encouraged domestic and international private sector actors to actively engage in Ethiopia’s energy sector.

Highlighting the critical role of agriculture in the nation’s economy, the State Minister underscored the need to leverage Ethiopia’s abundant ground and surface resources. He pointed out that limited power supply has been a key constraint to fully transforming the agricultural sector.

“There is now a more conducive environment for the private sector to undertake diverse development activities in Ethiopia. We opened up our economy to boost production and realize the country’s prosperity,” he said. He added that investment policies across all sectors—not just energy and agriculture—have been revised, further enhancing private sector opportunities.

International Solar Alliance Director-General Ashish Khanna also addressed the panel, noting that Ethiopia’s renewable energy potential remains underutilized, ENA reported. He commended the country’s ongoing economic reforms and stressed that the timing is ideal for accelerating growth in the sector. Khanna reaffirmed the alliance’s commitment to supporting Ethiopia’s solar transformation in line with government priorities.