UK-backed Gridworks signs landmark agreements to strengthen Ethiopia’s electricity transmission network
Ethiopia has secured about US$400 million in new investment from Gridworks, a British government-owned electricity transmission investor, to expand and modernise its national power grid as the country seeks to translate rising generation capacity into broader economic growth.
The agreements were signed on Monday during a visit to Addis Ababa by Britain’s foreign minister, Yvette Cooper, and form part of a wider UK engagement strategy in Ethiopia and the Horn of Africa. The projects mark the first public-private partnerships in Ethiopia’s electricity transmission sector, reflecting a gradual opening of a historically state-dominated industry under Prime Minister Abiy Ahmed.
One of the projects will connect Ethiopia’s Somali region to the central and north-eastern power grids, improving electricity access in an area that has long lagged behind the rest of the country. Officials say the connection will help close regional development gaps and support social and economic inclusion.
A second project will strengthen transmission infrastructure in the north-east to enable the development of new wind and solar power plants, while also improving cross-border electricity interconnections with Djibouti. The move aligns with Ethiopia’s ambition to position itself as a regional energy hub, exporting surplus power to neighbouring countries.
British Ambassador to Ethiopia Darren Welch said in a joint statement issued by the Ethiopian and British governments that transmission infrastructure is essential for growth, job creation and improving living standards, adding that the projects will help unlock Ethiopia’s vast renewable energy potential.
Finance Minister Ahmed Shide said the investments would make electricity supply more reliable for industry and accelerate grid connections for millions of households that still lack access to power. He noted that stronger transmission capacity is critical to supporting industrial parks, manufacturing growth and broader economic transformation.
Despite rapid expansion in electricity generation, including output from the Grand Ethiopian Renaissance Dam, Ethiopia continues to face bottlenecks in delivering power efficiently to users. Grid limitations have constrained the flow of electricity from major generation sites to industrial centres and remote regions.
With a population exceeding 120 million and one of Africa’s fastest-growing electricity demands, nearly half of Ethiopian households remain off-grid, highlighting the gap between generation capacity and distribution capability.
Alongside infrastructure investment, the United Kingdom has also agreed to provide up to £17.5 million in technical assistance to support Ethiopia’s public investment management and asset oversight systems. The programme is intended to improve planning, execution and governance of large-scale infrastructure projects.
UK officials have increasingly linked development support in the Horn of Africa to efforts to address irregular migration. According to British government data, a significant share of recent English Channel crossings originated from countries in the region, including Ethiopia.
Ethiopian authorities argue that expanding electricity access, strengthening infrastructure and supporting industrial development are central to job creation and reducing economic pressures that contribute to outward migration.
For Ethiopia, the Gridworks-backed projects represent a strategic step toward attracting private capital into critical infrastructure and ensuring that flagship projects such as GERD deliver sustained economic and social returns.
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