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 IEA. The report highlights the importance of translating these strengths into reliable and affordable energy services while accelerating progress towards the country's ambitious energy access targets.
The key findings of the review were presented on 27 October by Syrine El Abed, IEA Africa Programme Manager, during the Energy Day of the Ethiopian Water and Energy Week. 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 centre 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 review finds that stronger policy coordination, clearer institutional responsibilities and more reliable energy data will be essential to sustaining progress.
Ethiopia's 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 country's targets of 75% access by 2030 and universal access by 2035 will require continued grid expansion, greater deployment of off-grid solutions and measures to make connections more affordable.
High network losses and unreliable electricity supply continue to constrain households, businesses and economic development. The review emphasises the need for grid modernisation, improved utility performance and integrated power system planning to ensure that growing generation capacity delivers reliable and affordable services.
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 the country's substantial solar, wind and geothermal resources offer opportunities to diversify the power mix and reduce exposure to climate and hydrological risks. The review highlights the need to address financing constraints, infrastructure gaps and foreign exchange limitations to accelerate the deployment of these technologies.
Ethiopia's reliance on imported petroleum products also exposes the economy to international fuel market volatility. Expanding domestic renewable energy applications in agriculture and industry, exploring the use of domestic natural gas where required and 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 review highlights the need to address high upfront equipment costs through targeted financial support and consumer financing, while strengthening supply chains. Integrating clean cooking into power sector planning will also be essential to anticipate additional electricity demand and ensure reliable service as more households adopt electric cooking.
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. Despite reforms to improve the investment environment, high financing costs and foreign exchange constraints continue to hinder project development.
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. Sustained investment, diversified energy supplies and stronger policy implementation can help translate the country's substantial resources into improved living standards and greater regional integration.
As host of the COP32 in 2027, Ethiopia also has an opportunity to place the country and the continent at the centre of the global conversation on energy and climate.
