Ethiopia, UK Sign $400 Million Deal To Upgrade Power Grid Through PPP Model

Ethiopia and the United Kingdom have signed a major agreement to modernize Ethiopia’s electricity grid, marking a new phase in how the country develops its power infrastructure. The agreement was signed in Addis Ababa by Ethiopian Finance Minister Ahmed Shide and Chris Flavin, CEO of Gridworks, a power infrastructure company owned by the UK government. The signing ceremony was attended by Prime Minister Abiy Ahmed and UK Foreign Secretary Yvette Cooper, underlining the importance of the partnership for both countries.

The deal introduces public-private partnerships in Ethiopia’s power transmission sector for the first time. Under the agreement, Gridworks will invest $400 million to develop two high-voltage electricity transmission lines that are expected to improve grid reliability and expand access to power across key regions.

The first project involves building a 206-kilometer transmission line that will connect Ethiopia’s Somali region in the east to the country’s central and northeastern power grids. Until now, this region has largely remained outside the main national electricity network. The new line is expected to improve power stability, support local businesses, and help bring development to communities that have long faced limited access to reliable electricity.

The second project is a 198-kilometer transmission line in northeastern Ethiopia. This line is designed to support the evacuation of electricity from large wind and solar projects planned in the region. By strengthening the transmission network, Ethiopia will be better positioned to use its renewable energy resources and supply clean power to both domestic users and neighboring countries. The project will also enhance power interconnection with Djibouti, which is important for regional electricity trade and energy security in the Horn of Africa.

These investments support Ethiopia’s 2030 Ten-Year Development Plan, which aims to achieve 96 percent electricity access and raise installed power capacity to 20 gigawatts. Currently, around half of Ethiopia’s population does not have access to electricity, and frequent power outages continue to affect industries and job creation.

For the UK, the partnership forms part of a wider effort to support economic growth and reduce the causes of migration. During her visit, Foreign Secretary Yvette Cooper said that better infrastructure and stable jobs can create stronger opportunities locally. In addition to the grid projects, the UK has committed £17.5 million in technical assistance to help Ethiopia improve public investment management. Together, these efforts aim to promote long-term growth, reduce poverty, and position Ethiopia as a renewable energy leader in East Africa.