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Enhancing regional power trade in the horn of Africa

November 25, 2022

The African Development Bank Group's sixth edition of the Africa Energy Market Place (AEMP), focused on Djibouti, Eritrea and Ethiopia under the theme: Delivering Desert to Power in the Horn of Africa - Enhancing Regional Power Trade.

The virtual event was held from 25-27 October 2022 and brought together approximately 111 participants from governments, the private sector and development partners to highlight and discuss strategic projects and priority energy sector reforms in the three countries.

This year's edition highlighted the development of the Bank's Desert to Power Initiative which aims to accelerate socioeconomic development through the deployment of 10GW of solar power in the 11 countries of the Sahel region, including Djibouti, Eritrea and Ethiopia.

Opening the three-day event, African Development Bank (AfDB), Vice President Dr. Kevin Kariuki encouraged participants to leverage the opportunities presented by the AEMP. He told participants, 'The AEMP platform devises a collaborative mechanism and concerted approach to monitoring and implementation of the Country Priority Plans beyond the AEMP event to achieve the desired objectives'.

Dr, Daniel Schroth, Bank Director for Renewable Energy, presented the Desert to Power initiative and the Bank's ongoing initiatives in the Horn of Africa countries. 'Desert to Power's robust value proposition for the Horn of Africa countries includes mobilizing concessional resources at scale, availing project preparation support and facilitating match-making opportunities with the private sector seizing the energy potential of the three countries present,' he said.

Djibouti's Minister of Energy and Natural Resources Yonis Ali Guedi, shared the country's long-term goal, citing that 'our goal is to transit from thermal to 100% Renewable Energy, by optimizing the energy mix of geothermal, wind and solar and to achieve universal access by 2035, leveraging the country's huge RE potentials'.

Eritrea's Director of Energy Tesfay Ghebrehiwet, on behalf of the Mine and Energy minister reminded participants that the country has currently huge, suppressed power demands in industrial, mining and agriculture sectors and only 40% access rate. He also presented urgent projects that needed support in the country 'There is a pressing need to reinforce the National Electricity Grid to enable integration with neighboring countries and facilitate power trade under the East Africa Power Pool, while also reducing regulatory challenges hampering private sector investments in our power sector, he said, adding that his country is pleased to be counted under the Desert to Power Initiative which aligns with the country's priorities.

The government of Ethiopia presented its ambitions including current revision of its energy sector policy to focus on increasing private sector participation. Dr. Ing. Habtamu Itefa, Minister of Water and Energy also mentioned the country's green energy ambitions.

'We just launched a Green Hydrogen strategy to enable local production for both domestic consumption and export to the European market, a discussion is ongoing to sign a bilateral agreement for development and export of green hydrogen with Germany,' he said.

The cross-country session which focused on reinforcing the East Africa Power Pool (EAPP) also saw some critical discussions to prioritize investments into regional transmission networks in the region. A key outcome was the opportunity to invite private investment into transmission programs, through Public Private Partnership models. In addition, there were also calls to strategically unlock the potential of linking the EAPP with the Southern Africa Power Pool. This according to experts at the event, was a first step to creating the continental power market in Africa.

'The outcomes of the AEMP could become the small building blocks of the bigger African voice for COP7, for example the emphasis on the fact that energy transition comes with a cost, a cost that comes from Climate Finance that the African continent is struggling to access,' noted Dr Abdul Kamara, African Development Bank Deputy Director General for the East African region.

In closing remarks for the three-day meeting, Wale Shonibare, Bank Director for Energy Financial Solutions, Policy and Regulation reminded participants that 'the ultimate goal of the AEMP and its policy dialogue with Governments is to not only develop implementable actions with the respective countries but to secure commitment of all stakeholders to implement them in the coming years'.

Power Africa, the European Investment Bank, the International Energy Agency (IEA), Africa50, Africa Infrastructure Development Association (AfIDA), the Asian Infrastructure Investment Bank, the International Finance Corporation, the European Union, the World Bank, the East Africa Power Pool, the Southern Africa Power Pool, the UK's Foreign, Commonwealth and Development Office, JICA, Agence Francaise de Development, were among the many participants.

The Africa Energy Market Place is a collaborative investment platform created by the African Development Bank as part of the New Deal on Energy for Africa, the transformative partnership to light up and power Africa, in keeping with the Bank's High 5 strategic priorities.

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