According to the International Monetary Fund (IMF), at one time Ethiopia had one of the fastest growing economies in the world, but despite this it contends with poorness. The economy faces a number of serious problems, which are addressed with a focused investment in public infrastructure and industrial parks. The economy’s progress is highly dependent on the development of the nations’ hydro resources. Only 25% of the population has access to electricity today and the government plans to increase this up to 75% within the next five years.
Ethiopia has the second largest hydropower potential in Africa, with only 10% developed to date but nonetheless covering 90% of the nation’s electricity demand. Currently, installed capacity is about 4,330 MW of hydro, but more than 6,600 MW are under construction. By 2020, about 14,000 MW could be in operation. Besides hydro, also geothermal energy and wind are going to be intensively developped.
Already supplying power to the neighboring countries of Djibouti and Sudan, Ethiopia has further ambitious plans to connect East Africa with Southern Africa via a powerful transmission line. The first step is a 500 kV transmission line to Kenya and further agreements with Somali have been signed and negotiations with Tanzania completed.