Ethiopia and the United Kingdom have signed landmark agreement of US $400M aimed at modernizing Ethiopia’s electricity transmission network and accelerating nationwide access to power.
The deal, signed in Addis Ababa, introduces public-private partnerships into Ethiopia’s power transmission sector for the first time, marking a significant shift in how the country finances and develops critical infrastructure.
The agreement was formalised by Ethiopia’s Minister of Finance, Ahmed Shide, and Chris Flavin, Chief Executive Officer of Gridworks, a UK government-owned power infrastructure investor and subsidiary of British International Investment. The signing ceremony was attended by Prime Minister Abiy Ahmed and UK Foreign Secretary Yvette Cooper, highlighting the political and economic importance of the partnership for both nations.
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Scope of work
Under the deal, Gridworks will invest approximately US $400M to develop two major high-voltage transmission projects designed to strengthen grid reliability, expand electricity access and unlock Ethiopia’s renewable energy potential. The projects represent Ethiopia’s first privately financed transmission lines and are expected to play a central role in supporting industrialization and regional power trade.
The first project involves a 206-kilometre, 132-kilovolt transmission line connecting Degehabur and Kebridehar in Ethiopia’s Somali region to the central and north-eastern national grids. The Somali region has historically remained outside Ethiopia’s main electricity network, and the new line is expected to significantly improve power stability, support local businesses and stimulate economic development in underserved communities.
The second project is a 198-kilometre, 400-kilovolt transmission line between Hurso and Ayisha in north-eastern Ethiopia. This line is designed to enable the evacuation of electricity from planned wind and solar power plants in the region while strengthening cross-border electricity interconnection with Djibouti. Officials say the project will enhance regional energy security and reinforce Ethiopia’s ambition to become a renewable energy hub in the Horn of Africa.
The transmission investments align with Ethiopia’s Ten-Year Development Plan, which targets 96% electricity access and an installed generation capacity of nearly 20GW by 2030. Currently, around half of Ethiopia’s population lacks access to electricity, while frequent outages continue to constrain industrial productivity and job creation.
Alongside the grid projects, the United Kingdom committed up to US $21M in technical assistance between the 2025/26 and 2028/29 fiscal years to support Ethiopia’s public investment and asset management reforms. The support will be delivered through the second phase of the Ethiopia Investment Advisory Facility and is intended to improve planning, oversight and execution of large-scale infrastructure projects.
UK officials said the partnership reflects Britain’s long-term commitment to supporting economic growth, job creation and stability in Ethiopia. Ethiopian authorities, meanwhile, view the agreement as a critical step toward strengthening the power grid, attracting private capital and translating large-scale energy investments into inclusive and sustained economic growth.
