Policy-makers in Ethiopia, challenged by fluctuating oil prices and poverty, are seeking solutions that will improve the living conditions of its people and boost its fragile economy. One such solution, Ethiopian leaders hope, is renewable energy.

Statistics from the Ethiopian Ministry of Mines and Energy (MoME) indicate that the country spends about Ethiopian Birr 10 billion (US$800 million) annually to import petroleum products for domestic consumption. The figure, according to the MoME represents more than 90 percent of Ethiopia’s earnings from foreign trade each year. Were the country to tap some of its renewable energy potential, the energy independence it would achieve as a result, would be a boon to the economy.

Because of its location, Ethiopia is perhaps one of the most-suitable nations in Africa for tapping renewable sources of energy not only for its own economy, but also for export into regional economies such as Kenya, which is always looking at enhancing its energy capacity.

Biodiesel Production

While Ethiopia boasts of numerous green energy possibilities such as geothermal, solar and wind power generation, it is the biodiesel sub-sector that has taken off over the last few years and continues to witness increased attention both from the government and development partners from abroad.

Ethiopia is one of the largest countries in Africa but it is also one of the driest, a factor that renders most of its land unsuitable for agricultural production. This has led the Ethiopian government to shift its focus to biodiesel crops that flourish under the harsh climatic conditions of Ethiopia.

The shift from expensive fossil fuels to cost-effective biofuels has received a stamp of approval from the Ethiopian government. It recently approved a 16-page renewable energy strategic document that was prepared under a collaborative partnership between the MoME, the Ministry of Trade and Industry (MoTI) and the Ministry of Agriculture and Rural Development (MoARD).

According to an expert from the Ministry of Finance and Economic Development (MoFED), as the country has grown over the last few years, it has had to devote more and more of its already limited resources towards the purchase of petroleum products and now sees a clear need for cheaper energy that it hopes to get through renewables.

The most popular biodiesel plants in Ethiopia include castor seeds and jatropha curcas. Numerous companies from India, Europe, Israel and the United States have formed joint partnerships with local companies to help grow the plants for biodiesel extraction.

One of these companies that has already started operations is Global Energy Ethiopia (GEE), which has pumped in more than Ethiopian Birr 200 million (US$ 20 million) in a castor and jatropha seed farming and processing program that will allow GEE to process more than 40,000 tonnes of crude oil when fully operational. GEE started production in 2007 after it leased more than 30,000 hectares of land in Wolaita Soddo in the Southern Nations Nationalities and Peoples Regional State (SNNPR).

The World’s Largest Biodiesel Producer?

In addition to GEE, Eco Energy is an Ethiopian company that has entered into a partnership with the Indian-based Jatropha World. The partnership allows for the exchange of technical expertise that will allow Eco Energy to develop a 25,000 hectare jatropha farm for biodiesel production.

According to Robel Debebe, the Chief Executive Officer of Eco Energy, the firm is set to pump in more than Ethiopian Birr 250 million (US$25 million) towards the biodiesel venture that will see the company produce jatropha crude oil for the local market and for export, especially to European nations.

According to MoME, biodiesel offers Ethiopia one of the best alternatives to expensive fossil fuels and accords the progressively expanding Ethiopian economy cheap energy sources. The growing interest in the sector is evident, as the Ethiopian Investment Agency (EIA) has over the last two years registered more than 60 companies interested in venturing into the biodiesel production sub-sector.

According to EIA, there are more than 25 million hectares of land available in Ethiopia suitable for biodiesel crop farming. If fully developed, this would make Ethiopia the largest biodiesel producer in the world, with an annual output of more than 20 million litres of crude oil processed from biodiesel crops.