Ethiopia signs MOU with ATIDI to support renewable energy projects

Addis Ababa, February 18, 2025 (FMC) – The Federal Democratic Republic of Ethiopia, represented by the Ministry of Finance and Ethiopian Electric Power (EEP), has signed a Memorandum of Understanding (MoU) with the African Trade Insurance Agency (ATIDI), a leading pan-African trade and investment insurer.

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 Ethiopian finance ministry reported today.

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.

In his key message, Mr. 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”.

Mr. Manuel Moses, CEO, of ATIDI, 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. Since its inception, guarantees worth USD 24.7 million have been approved under the RLSF portfolio; in turn facilitating investments totaling USD 373.1 million and the development of 181.95 MW of installed renewable energy capacity across Africa. In the first round allocation for Ethiopia solar and wind projects are lined up for the Regional Liquidity Support Facility coverage.