The document discusses wind energy development in Ethiopia. It notes that Ethiopia will need to add around 33 GW of electricity over the next 20 years to support economic growth. Wind energy could help meet this need and set an example for private sector energy projects. The Aysha wind farm is presented as a case study, describing its 120 MW planned capacity and progress toward development. Financing structures will be key to increasing capacity and driving economic growth in Ethiopia.

1. Wind Energy Development in Ethiopia Status quo, the Wind Energy PPP and Experiences from Aysha Wind Farm Development NEFAS New Energy For African Societies Ethio-German Konnect presentation Addis Ababa, November 09, 2011

5. Wind energy could play an important role to master this challenge and set the example for energy projects with a private institutional set-up Cumulative capacity costs, effects of financing levers 1) (2009-2030, in mil. US$) Characteristics of wind energy in Ethiopia 65,071 53,354 35,824 25,077 [mil. US$] 1) Capacity costs based on EEPCo planning for the period 2009 – 2018 and capacity needed to supply projected demand in following years; cost per MW for the period 2019 – 2030 of 2 mil. US$ Source: EEPCo Strategic Plan Summary (December 2009); IEA World Energy Outlook (2009); NEFAS calculations 1. Complementary to hydro power 2. Pipeline to fill supply gaps and serve energy demand growth already exists 3. Potential to achieve long term growth prospects 4. Local value addition possible to finance immense capacity costs 5. Can trigger Ethiopian metal sector and offer high export potential

9. Success depends on overcoming inter-depending hurdles along the value chain and financing local activities Success factors in the Ethiopian environment Source: NEFAS 1. Collaboration of key players along the value chain 2. Acquisition of funds to finance local activities 3. Combination of suitable technical solutions with financial sources

10. Interest in Ethiopian wind is high – common resistance predominantly found in the market Inter-depending hurdles in Ethiopia (Exemplifications) “ There is not enough MW installed yet” “ No local project development capacity” “ No local S&M, Operations capacity” “ No FIT, longevity for tariffs, low level of tariffs” “ Limited possibility for private sector involvement” … . Source: NEFAS experiences 1. Collaboration of key players along the value chain

11. Collaboration of key players along the value chain is needed to get things started Operations Construction Manufacturing Service and Maintenance Supply chain management Operations Construction Manufacturing Service and Maintenance Supply chain management Project development Capacity building on ministerial, institutional and private sector level Policy dialogue on Prime Minister, Ministerial, Regulatory Level Gaps along the value chain to be addressed Source: NEFAS 1. Collaboration of key players along the value chain

15. Location for the wind farm with promising site characteristics – 120 MW MoU and studies showing feasibility Reliable, high average wind speeds during the year Sandy gravel with strong load carrying capacity Location close to grid and heavy duty all-weather road Very flat terrain with some wind-bent vegetation Source: Aysha feasibility studies 120 MW MoU Site characteristics SITE CHARACTERISTICS

17. Resulting from the institutional set-up, the financing structure is the key component in the cycle from capacity increase to economic growth Capacity increase/ economic growth cycle Source: NEFAS Tech transfer Debt burden Economic growth Electricity demand FDI Local manufacturing and value added Financing Institutional set-up Capacity increase Determines price per MW, FDI and potential for technology transfer

18. NEFAS – New Energy for African Societies Project Office Zola Road, near Mozambique Embassy Addis Ababa Ethiopia Mobile: + 251 920 312 036 Email: [email_address] Webpage: www.ethiopianwind.com NEFAS