Power Utility Spends Past Its Record Year

Aug 9 , 2026. By BEZAWIT HULUAGER ( FORTUNE STAFF WRITER )

The Ethiopian Electric Utility (EEU) spent 133.59 billion Br in the 2025/26 financial year, outrunning its own record revenue by 14.69 billion Br. Revenue itself climbed 88.4pc to 118.91 billion Br, with internal earnings of 107.65 billion Br financing 80.6pc of the outlay.

The state utility company, the Ethiopian Electric Utility (EEU), spent hundreds of billions of Birr last year, outrunning its own record revenue, as it poured money into network expansion, maintenance, and electricity access. The Company’s senior executives say the overspend was deliberate.

A utility that sells power for a fraction of what it pays for it is borrowing against its own balance sheet to chase near-universal access. The gap between ambition and income is widening as fast as the grid.

"We covered the cost from our treasury," said Getu Geremew, chief executive officer, at a press briefing at the Hayat Regency Hotel on Africa Avenue (Bole Road) last week.

He called the spending beyond collected revenue a “strategic reinvestment” meant to cut interruptions, extend the network and modernise infrastructure.

The EEU spent 133.59 billion Br in the 2025/26 financial year, exceeding its record by 14.69 billion Br. It earned 118.91 billion Br in revenue over the year, an 88.4pc increase on the previous fiscal period. Internal revenue reached 107.65 billion Br, financing 80.6pc of expenditure and covering most operating and capital needs. Operational spending came to 68.01 billion Br, 3.4pc above the annual target, while capital use was 65.59 billion Br, about 71.1pc of the planned amount.

Two items, bulk energy purchases and infrastructure work, dominated the outlays, together taking more than 77pc of total spending. The EEU paid 48.42 billion Br to the Ethiopian Electric Power (EEP) for bulk energy and 55.21 billion Br on construction and maintenance. Rehabilitation absorbed 7.2 billion Br and rural electrification 6.61 billion Br.

Foreign grants financed 21.64 billion Br, while budget from the federal government and loans from development partners made up two percent and 1.2pc, respectively, of total financing.

Despite the record revenue, the EEU remains under financial pressure from low tariffs, recurrent vandalism on its infrastructure and non-technical losses. Getu conceded that the Utility operates under a “difficult financial model,” buying electricity at a considerably higher price than the rate at which it sells the service, a tariff he described as among the lowest in the world.

According to a residential average price for a kilowatt-hour covering 60 countries in 2024, households in Ethiopia paid the lowest tariff at 0.006 dollars, second only to Iran. Those in Bermuda paid the world’s highest at 0.466 dollars, followed by Ireland (0.447) and Italy at 0.415 dollars/kWh.

“Generating one kilowatt-hour (kWh) of energy costs between 6.5 and seven US cents, yet it is sold for less than two US cents," said Getu, calling the burden a "massive loss" the EEU absorbs.

According to the CEO, the Company also subsidises the poorest users.

“For nearly two million low-income citizens using less than 50kWh, we sell the energy at only 50pc of the price we buy it for from the power company," Getu said. “The Utility has to keep supplying households and businesses despite the gap between cost and tariff.”

Although 80.6pc of expenditure was financed internally, the scale of investment needed to meet access to universal electricity targets pushed spending beyond current income. The shortfall in billions of Birr was covered through EEU's profit and internal capacity, amounting to extra investment in the network.

Cable and transformer theft caused 570 million Br in property damage during the year. After inspecting 2.47 million meters and uncovering more than 1,000 cases of illicit consumption, EEU managers recovered 2.2 billion Br from energy theft, metre bypasses and faulty metres.

“Those challenges are a massive test for the company," Getu said.

Independent analysts, such as Yemanebrehan Kiros, manager at Yomener Energy Auditing & Engineering and an energy expert with a decade of experience, see the losses as chronic rather than incidental.

For Yemanebrehan, energy waste is a persistent problem, observing that the volume of energy EEU buys does not match what it sells. He echoed the reported loss of more than half a billion Birr to theft. He urged the Utility to widen smart-metre coverage, which he said reaches only 1.6pc of customers. He also pressed the Company to adopt international energy-management standards such as ISO 50001, which he believes could yield energy savings of up to 30pc.

For all the pressure, the access numbers still moved. EEU connected 664,505 new customers, 83.1pc of its annual target, and electrified 205 towns and villages through its rural expansion programme. Digital-payment use climbed to 95.3pc of the customer base.

It plans to connect 1.1 million new customers during the 2026/27 budget year.

The spending forms part of EEU's revised strategic mission to achieve 100pc electricity access by 2035, requiring up to 30 billion dollars in public investment. Studies the Utility cites signal that lifting coverage to 75pc by 2030, through on-grid and off-grid solutions, would need more than 9.6 billion dollars, though some records put the figure near 10 billion dollars.

The Company’s 25-year master plan identifies an immediate need for more than 1.6 billion dollars to upgrade the existing network and create additional access. Its executives hope this will help them finance backbone infrastructure such as generation links, transmission lines and substations, to address frequent interruptions and modernise the ageing grid.

Several multimillion-dollar projects are already underway. The 55-million-dollar project to expand transmission and distribution in Addis Abeba was 61pc complete and is meant to reduce interruptions in the capital. Another project covering 10 cities, backed by 67.43 million dollars, targets upgrades in centres including Bishoftu, Debre Brehan and Nekemte, while the 141-million-dollar Prime-1 project covers 72 towns.

The EEU has also spent more than 10 million dollars on equipment for 40 electric-vehicle charging stations and plans to invest in 30 further stations to leverage the country's transition towards electric mobility.

However, Getu admitted that supply bottlenecks slowed the build-out. The reinforcement steel used inside concrete poles had not been available from domestic producers, forcing imports and holding distribution-network expansion below plan. He expects that to ease as domestic investors begin producing the steel and more concrete-pole plants open, supporting heavier infrastructure works.

In condominium developments, EEU has to align underground cabling and other civil works with teams from the Addis Abeba City Administration before installing poles and transformers.

According to Yemanebrehan, the steel shortage had held back physical expansion, and importing the material had grown dearer because of high logistics costs tied to wars in the Middle East. Reliability remains a worry in fast-growing districts such as Bole, where new cafés, commercial buildings and businesses have created unpredictable loads that have outrun network upgrades.

According to the expert, grid infrastructure could take five to six years to catch up with the pace of urban growth. He pressed for using smart-metre data to set energy-efficiency standards for buildings and introducing time-of-use tariffs, with prices varying between day and night to push demand into off-peak hours and ease pressure on the grid.

Getu argued that the long-term economic return from electricity access justifies the Utility's capital-intensive investment programme. Citing a World Bank study, he said every dollar invested in the Utility's infrastructure and services yields an estimated 2.98 dollars.

Yemanebrehan made a related case, arguing that electricity investment should be judged by its indirect benefits, from schools to clinics and other public services.

“Public involvement remains indispensable despite debate over privatisation, because private investors would favour profitable urban centres and leave the state to serve rural areas where the gain is small but the effort is high,” said Yemanebrehan.

For Getu, EEU's mandate reaches past selling power to underpinning the country's digital, economic and development goals for 2030 and 2035.

“Energy is the bridge between poverty and prosperity,” he said.

PUBLISHED ON Aug 09,2026 [ VOL 27 , NO 1371]