26 November 2013, Addis Ababa – A new proclamation that encourages the private sector to get involved in energy production and reestablishes the former Ethiopian Electric Agency as the Ethiopian Energy Authority was ratified on Tuesday by the House of Peoples’ Representatives (HPR).
The new law amended and replaced the existing proclamation, which allowed for a monopoly of state-owned enterprises in the Ethiopian energy sector.
It also introduced a new regulatory body to the sector, the Ethiopian Energy Authority, vested with the power to issue licenses for generation, transferring, distribution and selling, as well as the import and export of electricity in the country. As per the provision of the proclamation, the new agency is also responsible for issuing permits for private sector players who want to join the energy production sector. The newly established authority has replaced the Ethiopian Electric Agency.
The new authority differs from the old agency in three notable ways: energy efficiency and conservation, mandating regulation and establishment, and the administration of energy funds under its own administrative board.
The proclamation introduces the establishment of an Energy Efficiency Fund, tasked with providing loans and financial support to companies and individuals who invest in energy efficiency and conservation activities. The Authority also has a board with the power to review tariff proposals in relation to the national grid, ultimately submitting them to the government for approval.
It has also been given the mandate to devise directives to identify the competency of potential investors who seek investment licenses, including the review of financial capacity, technical skill and professional experience.
– The Reporter