Remarks by Peter Vrooman U.S. Deputy Chief of Mission at the Technical Briefing on Building a Reliable Electric Network

Remarks by Peter Vrooman
U.S. Deputy Chief of Mission
At the Technical Briefing on Building a Reliable Electric Network
Sheraton Hotel, March 16, 2016
U.S. Embassy Addis Ababa

(As prepared for delivery)

Good morning, I am Peter Vrooman, Deputy Chief of Mission at the U.S. Embassy. Ambassador Haslach extends her regrets that she could not be here today because of commitments in Washington DC, but as you know she is fully committed to bringing reliable and clean power to Ethiopia.  I am very pleased to welcome you all to this technical briefing – “Building a Reliable Electricity Network in Ethiopia” presented by MacLean Power Systems. As you know, MacLean is a well reputed, 90 year old manufacturing company, known to deliver quality, reliability and value to its customers in Ethiopia.  This workshop is a great opportunity to share best practices and to have a candid dialogue where technical experts from MacLean can share their project experiences in Transmission and Distribution projects while learning more about the Ethiopian Government and Utilities’ goals and priorities.  The U.S. Foreign Commercial Service, the office at the U.S. Embassy that represents U.S. companies and is responsible for promoting trade with Ethiopia,  is delighted to support this event and we look forward to an engaging session. This is just another example of the U.S. Embassy’s commitment to fully engage with Ethiopia to bring quality sustainable U.S. companies to Ethiopia to build capacity and help Ethiopia meet its GTP2 power objectives.

Specifically, I want to emphasize the U.S. government’s commitment to partnership with and support for the Government of Ethiopia’s commitment to achieving universal power accessibility and reliability by 2022. This goal was a cornerstone of the Growth and Transformation Plan-1 (GTP-1) that concluded in 2014 and continues to garner centre stage in GTP-2.  As has been widely reported, efficient implementation in GTP-1 led to an increase in electricity coverage from 41% in 2009 to 54% in 2014. The goal now is to get to 90% by 2020 – a goal we fully support.

This event comes on the heels of the passage of the U.S. Government’s Electrify Africa Act which builds on our Power Africa commitments, aims to expand electricity in sub-Saharan Africa to 50 million people, and add 20,000 MW of electricity to the grid by 2020 through U.S. Export-Import Bank loan guarantees. I am happy to say that EXIM Bank is back and has expanded its commitments of medium term financing for Ethiopia as was highlighted two weeks ago with the visit to Ethiopia of the Chief of Staff of the EXIM Bank. Being a partner of Power Africa, OPIC (the Overseas Private Investment Corporation) has also significantly contributed by committing $1.6 billion to create around 1,500 MW of on-grid power throughout sub-Saharan Africa and to support transmission, distribution, and generation projects for both renewable and traditional sources of energy. We also expect a visit by OPIC to Ethiopia later in the year. Also, USTDA, the Trade and Development Agency has been actively engaging with the Government of Ethiopia by providing procurement value-added training here in Ethiopia with the recent Global Procurement Initiative. We are now sending several procurement specialists to the US for training to help Ethiopia get the best value-added for their money.  As you know “cheap is expensive” in the long run. We have also been providing EEP with a procurement advisor, funded by a USTDA grant, to EEP to work with your colleagues in evaluating power project tenders. Lastly, we are working on launching a clean tech renewable energy incubator here in Ethiopia where private sector innovative technologies can be launched and shared to build jobs, opportunities and capacity.

Insulators are a critical technology, and among the most cost-effective investments to improve power delivery.  While only 3-4% of the cost of the overall network, poor quality insulators typically cause 75-80% of the line failures.  Investing in quality insulators is the biggest “bang for the buck” value-added for the Ethiopian utilities and Government.  High-quality insulators increase the effectiveness of power delivery, reduce maintenance and replacement costs and limit resources spent on assessing the cause and location of disruptions to the network.

Through President Obama’s Power Africa Initiative, the United States has provided support to help the Ethiopian Government negotiate the country’s first power purchasing agreement on the 500 MW Corbetti project, as well as providing financial modelling and other technical assistance for geothermal development to Ethiopian Electric Power Corporation. Furthermore, we are currently working with the government in drafting a new geothermal law to further clarify rules on development rights and resource exploration which are integral in closing power sector transactions and ensuring government oversight. Finally, Power Africa has also helped in the formation of a working group of representatives from Ethiopia, Tanzania, and Kenya energy utilities and regulators to anticipate future power agreements as surplus power becomes more available in the East Africa region.

Partnering with MacLean Power Systems for this event is an extension of these efforts and an example of how the private sector must both lead and partner to achieve our common goal of universal access to power.  To that end, we are pleased to be joined by Mr. Patrick Hawes of MacLean. Mr. Hawes has spent his distinguished 30+ year career on the continent working in the power sector. Mr. Hawes is here today to share his expertise on the importance of quality in insulators in maintaining sustainable power transmission. I wanted to also mention that MacLean’s Power System International is headed by Margaret MacLean. Margaret comes from a robust family background in manufacturing, which is a key driving factor of Ethiopia and its GTP 2. Margaret brings hands-on expertise in this sector and in celebration of Women’s History Month, her achievements are and can be an encouragement to women working in this highly technical sector, like EEP’s Engineer.

I wish you all an engaging workshop. And I hope that this morning would yield a lively and productive discussion.

I now invite Ato Gossaye Mengiste, CEO of Ethiopian Electric Utility to say a few words before we start the sessions.