Gridworks, a UK government-supported investor, will fund and develop around $400 million in electricity transmission projects in Ethiopia as the nation works to upgrade its power infrastructure and encourage private sector investment.
On Monday, during a visit by UK Foreign Minister Yvette Cooper, agreements were finalized for Gridworks, a UK government-supported investor, to develop and finance roughly $400 million in electricity transmission projects in Ethiopia. These initiatives form part of the UK’s broader engagement with Ethiopia and the Horn of Africa.
The projects represent Ethiopia’s first public-private partnerships in electricity transmission, marking a shift in the traditionally state-controlled sector under Prime Minister Abiy Ahmed.
One of the projects aims to link the Somali region to the central and north-eastern grids, improving power availability in a region that has historically had limited access. The second project will strengthen electricity interconnections with Djibouti and support the development of wind and solar power plants in the north-east, advancing Ethiopia’s goal of becoming a regional energy hub.
“Transmission networks are vital for economic growth, job creation, and improving livelihoods, and these projects will unlock Ethiopia’s significant renewable energy potential,” said British Ambassador to Ethiopia Darren Welch in a joint statement from the Ethiopian and UK governments.
Ethiopia’s Finance Minister, Ahmed Shide, noted that the projects will enhance industrial development by providing more reliable electricity while accelerating household electrification, bringing power to millions who have yet to receive their first connection.
Despite growing power generation capacity, including output from the Grand Ethiopian Renaissance Dam (GERD), Ethiopia continues to face challenges in delivering electricity efficiently. Limitations in transmission infrastructure prevent smooth distribution from generation sites to industrial hubs and remote communities.
With a population exceeding 120 million, the country has one of Africa’s fastest-growing electricity demands. Nearly half of Ethiopian households remain off-grid, highlighting the disconnect between generation capacity and distribution. Officials say investment in transmission is crucial to turning large-scale energy projects into tangible economic benefits.
From an economic and political perspective, expanding electricity access is also seen as a tool to reduce pressures that drive migration. Successive UK governments have prioritized curbing illegal migration, while Ethiopian authorities argue that improved infrastructure and industrial growth are key to creating jobs and easing economic strains.
The Gridworks-backed transmission projects reflect Ethiopia’s gradual opening to private sector participation in critical infrastructure and signal a renewed focus on reinforcing the national grid to support long-term growth in Africa’s second-most populous nation.