United Arab Emirates-based renewable- energy company Masdar has committed to helping Ethiopia exploit its enormous solar energy potential to spur economic growth.

This comes after the company signed a memorandum of understanding with the Ethiopian government to explore solar opportunities across the country, with a target to generate 500 MW in the medium term.

“This initiative will mark a significant step forward for Ethiopia’s efforts to diversify its energy mix and to drive economic development,” says Masdar CEO Mohamed Jameel Al Ramahi.

He adds that Masdar has been a catalyst for renewable-energy and clean-tech innovation in more than 30 countries and is determined to cooperate with the Ethiopian government to help deliver universal access to electricity in the country.

In Africa, Masdar’s solar development efforts have seen the company complete 30 MW of solar photovoltaic (PV) in Egypt, while it is also working alongside EDF and Green Africa to develop a project in Morocco that will feature PV, concentrated solar power and energy storage.

The agreement covers the development, financing, design, engineering, procurement, construction, testing, commissioning, insurance, ownership, operation, maintenance and transfer of photovoltaic (PV) plants and the infrastructure required to transmit the electricity.

Additional plans call for the signing of power purchase agreements and other agreements later this year and to begin commercial operations in 2022.

Despite its abundant solar resources, Ethiopia has only 14 MW of solar generation capacity, equivalent to 0.3% of its total generation capacity.

The country has identified nine sites with potential to generate 900 MW. An amount of $1.2-billion will be required to implement the project under a public–private partnership arrangement.

Although Ethiopia has committed massive resources into the energy sector, particularly hydro and wind, about half of the country’s 100-million population does not have access to electricity.

The country’s National Electrification Programme aims to achieve universal energy access by 2025 and to become a power hub in the East African region, with exports to countries such as Kenya, Djibouti and South Sudan.

The Ethiopian government is also focused on diversifying its energy mix so that it includes wind, solar and geothermal sources to reduce dependence on hydropower.

Research has shown that virtually nonexistent solar PV capacity in Ethiopia can reach an impressive 3.3 GW by 2025 and hit the 5.3 GW mark by 2030.

Currently, hydro accounts for 96% of electricity generation in Ethiopia, with the remainder generated using wind.