Ethiopian Electric Power (EEP) has announced a major operational breakthrough regarding its regional power export architecture, confirming that energy exports routed to Tanzania are successfully passing through Kenyan financial and transmission networks. The development was detailed during a comprehensive institutional briefing in Addis Ababa, where EEP Chief Executive Officer Ashebir Balcha presented the company’s performance report for the 2025/2026 fiscal year alongside strategic targets for 2026/2027.
The cross-border power transaction model relies on infrastructure linking Ethiopia, Kenya, and Tanzania. Following nearly five to six months of meticulous trial operations and testing, EEP has finalized the framework allowing Kenyan financial channels to securely process and settle payments for the energy delivered to Tanzania. Because the transmission relies on the regional grid corridor, Kenya effectively underwrites and executes the financial settlements for the Tanzanian power supply. This mechanism ensures that Ethiopia’s export revenues are captured safely and accounted for through established regional partner frameworks.
Elaborating on Ethiopia’s alignment with the African Continental Free Trade Area (AfCFTA) and broader continental integration goals, EEP emphasized the country’s dominant role in the East African Power Pool (EAPP). Ethiopia commands over 70 percent of the market share within the regional integration framework, positioning it as the primary engine for cross-border electricity trade. Building on this foundational success, EEP is actively expanding its geographical footprint. Feasibility studies have already been concluded for power interconnection projects with South Sudan, with financial backing being secured through the World Bank. Similar developmental steps have been finalized with Somalia, paving the way for future construction and transmission phases that will extend clean energy access deeper into the Horn of Africa.
However, scaling these regional ambitions is not without operational hurdles. The CEO pointed out significant grid constraints, particularly along the Ethiopia-Kenya-Tanzania corridor, where network congestion limits transmission capacity. Despite Ethiopia holding robust generation capacity, current regional grid bottlenecks restrict sustained high-volume flows—sometimes capping transmission volumes significantly below optimal targets unless urgent localized infrastructural upgrades and network reinforcements are implemented. Furthermore, internal governance within the power pool remains a focal point of advocacy; EEP has faced structural tug-of-wars regarding market operations, successfully pushing back against external attempts to detach market operators from the core power pool structure, ensuring Ethiopia retains a robust voice in regional energy trade governance.
While regional integration remains a vital pillar of Ethiopia’s macroeconomic strategy, the vast majority of the nation’s generated energy continues to serve domestic consumers. The Ethiopian Electric Utility (EEU) remains the primary domestic off-taker, accounting for 56.4 percent of total power distribution to ensure broad public access. Heavy industries also represent a crucial segment of the domestic grid economy. Large-scale industrial consumers—including cement manufacturers and ICT parks under the Industrial Parks Development Corporation (IPDC)—directly consume approximately 4.2 percent of the generated energy through high-voltage 132kV lines and above. Additionally, strategic national transport assets like the Ethio-Djibouti Railway utilize about 0.4 percent of the total generated energy.
A notable feature of the 2025/2026 fiscal cycle has been the temporary allocation of surplus energy to data mining and technological operations. Designed to monetize power that would otherwise go unused before full industrial and regional demand catches up, data-mining facilities accounted for roughly 32.5 percent of the energy allocation.
A comparative analysis of energy allocation versus financial generation underscores the economic diversification of the sector. Data mining operations consumed 32.5% of energy, generating a substantial 50.4 billion Birr in revenue, while international power exports including Kenya and Djibouti maintained a high-volume output, bringing in approximately 46 billion Birr, with specific export streams yielding 16 billion Birr from Kenya and 5.5 billion Birr from Djibouti. Meanwhile, the domestic utility EEU represented 56.4% of total energy consumption directed toward public distribution, heavy industries and parks consumed 4.2% of energy and contributed 3.9 billion Birr in revenue, and the Ethio-Djibouti Railway utilized 0.4% of energy to generate 0.5 billion Birr.
