Ethiopia has signed a Memorandum of Understanding (MoU) with the African Trade Insurance Agency (ATIDI), a leading pan-African trade and investment insurer to collaborate on clean energy.
According to the Ethiopian Ministry of Finance, who signed the agreement along with the Ethiopian Electric Power (EEP),said " This milestone agreement is designed to accelerate Ethiopia’s transition to clean energy by attracting foreign investment into renewable energy projects through ATIDI’s Regional Liquidity Support Facility (RLSF)."
The MoU establishes a framework for collaboration between Ethiopia and ATIDI, ensuring that Independent Power Producers (IPPs) or Public Private Partnerships can leverage RLSF, a liquidity support mechanism developed by ATIDI in partnership with KfW Development Bank and Norad. RLSF provides financial protection to IPPs/PPPs by availing and accelerating payments owed by state-owned utilities, addressing a key challenge in the energy sector by enhancing payment security and financial stability,the Ministry noted.
During the signing ceremony, Finance Minister, Ahmed Shide said “Through this partnership, Ethiopia aims to facilitate timely payments to developers, mitigate financial risks, strengthen the bankability of power purchase agreements (PPAs), and enhance the creditworthiness of EEP”. His Excellency further strengthened his message by stating the fact that these efforts will “create a more attractive investment environment for renewable energy projects”.
ATIDI CEO, Manuel Moses on his part, conveyed a message saying, "We are honored to partner with the Government of Ethiopia and Ethiopian Electric Power to support the development of the country's renewable energy sector. Through our liquidity support, this collaboration will not only reduce financial risks but also attract more investment into Ethiopia’s energy infrastructure. We believe that this partnership will help accelerate the growth of Ethiopia's renewable energy capacity and contribute to the broader goal of sustainable development across the African continent."
Ethiopia becomes the 11th ATIDI member state to sign the RLSF MoU joining Benin, Burundi, Côte d’Ivoire, Ghana, Kenya, Madagascar, Malawi, Togo, Uganda, and Zambia.
In the first round allocation for Ethiopia solar and wind projects are lined up for the Regional Liquidity Support Facility coverage.