They are not required to go through the usual profit repatriation process
Foreign companies involved in power generation, in partnership with the government, will be paid in USD when they supply electricity to the national grid. It is expected to encourage foreign companies involve in the energy sector under the Public-Private Partnership (PPP) scheme.
A rule approved by the Board in charge of overseeing PPP deals, comes after repeated request from foreign energy developers were made, demanding the government pay in foreign currency to generate electricity and supply to the national gird.
Before the introduction of the new rule, foreign developers, which are yet to join the energy sector, were allowed to get payments in local currency and repatriate it later, discouraging many from joining the sector.
Tilahun Tadesse, director general of PPP at the Ministry of Finance, said the permit given to international developers will be instrumental to get potential bidders in the future.
“There was low demand to bid since companies were only allowed to get paid while producing electricity and selling it to the Ethiopian Electric Power,” said Tilahun.
The new rule has already been communicated to the National Bank of Ethiopia (NBE), whose officials are among members of the board.
The change is made as the government prepares a bidding document to tender the Gad and Dicheto solar projects and another similar project in Wolenchiti and Hurso.
Gad and Dicheto solar projects, which are expected to generate 250 MW of electricity and consume USD 300 million, were given to the Saudi based ACWA Power but was terminated after the developer failed to make progress.
The other two projects in Wolenchiti and Hurso have a total generating capacity of 275 MW and are expected to consume a total of USD 315 million.
Last year, Masdar Abu Dhabi Future Energy Company PJSC, based in UAE, signed an agreement with the government to construct a solar power generation plant in Ethiopia, under the PPP scheme.
