Power Utility Hits Targets as the National Grid Falls Behind

Feb 8 , 2026. By YITBAREK GETACHEW ( FORTUNE STAFF WRITER )

The state-owned utility, Ethiopian Electric Utility (EEU), finds itself at a critical juncture. Despite reporting the inspection of nearly half a million issues in its network and exceeding targets for transformer maintenance and installation, the company admits falling short in key infrastructure projects, with only 71pc of planned meter installations completed and less than half of the targeted new medium- and low-voltage lines built this year.

The push toward mass electrification is colliding with limited finance, infrastructure setbacks, and persistent service disruptions.

Despite the upbeat rhetoric from top executives at the state-owned Ethiopian Electric Utility (EEU), the latest performance disclosures reveal a company struggling to reconcile ambition with reality. Senior executives of the Utility reported meeting "all its targets" for transformer and energy metre inspection, revenue collection, and transformer installation. However, the company has fallen short on key fronts, particularly in expanding the medium-voltage network, installing meters, and addressing persistent power outages nationwide.

Getu Geremew, CEO of the EEU, insisted the company’s performance remains strong despite challenges. He pointed to affordability as a persistent constraint, noting that the average cost of an electric meter is up to 14,000 Br, which is particularly expensive for rural customers. The company expected to install 1.5 million electric meters a year, but achieved only 71pc, again blaming affordability and the need to buy meters.

“Affordability is a major issue, especially in rural regions,” Getu said. “We're working with financial institutions to address this.”

The Utility’s recent performance report, released on February 5, 2026, at the Hayat Regency Hotel, on Africa Avenue (Bole Road), unveiled the breadth of these challenges. Inspections of the distribution network over the last nine months flagged more than 488,884 issues, although the executives claim 53pc have been resolved

Yemaneberhan Kiros, manager at Yomener Energy Auditing & Engineering Plc, observed that outages are most frequent at night when demand is at its peak. He urged EEU's executives to consider time-based tariff structures to manage demand more effectively.

“Power disruptions must be avoided,” he said. “When there is a heavy load, higher tariffs for large users can help regulate consumption.”

He also pointed out that disruptions are not solely the company's fault. Users contribute, engaging in "unsafe practices and using high-consumption appliances." Public awareness, he says, remains a large gap. Modernising infrastructure and enhancing inspection systems are essential, according to Yemaneberhan, if disruptions are to be reduced.

He stated that addressing infrastructure shortcomings requires ongoing investment and more government attention.

Ethiopia is part of "Mission 300 Million," an initiative launched in April 2024 that plans to provide electricity to 300 million Africans over the next five years. The project has secured nearly 54 billion dollars in funding from a coalition of partners, including the World Bank and the African Development Bank (AfDB). The initiative targets roughly half of sub-Saharan Africa’s population currently without electricity, aiming to deliver reliable access by 2030.

The electricity demand is far from met. Of the more than 25 million households in need of electricity, only 5.4 million are connected to the national grid. In the first half of the current fiscal year, electrification projects reached 63 kebeles at a cost of 3.57 billion Br. The company connected 266,900 new customers, a 13.2pc increase from the same period last year, but still fell short of its target of 377,000.

Facing these gaps, EEU is planning to outsource parts of its operations to third-party service providers.

“In the coming year, we'll assign part of our work to third parties,” Getu disclosed.

For Yemanebrhan, outsourcing can improve performance across generation and distribution by adding small-scale generation and better management.

“Power disruption is not only about capacity," he told Fortune. "It's also about load. The recurring power disruptions are not only due to limited generation capacity."

Yemanebrhan attributed infrastructure gaps, mismanaged loads, and weaknesses throughout the electricity system to the limitations. He sees outsourcing of certain sector functions, especially management, maintenance, and rehabilitation, as a practical next step.

The national grid is in transition, supported by investment and ambitious goals for the 2025/26 fiscal year. A core part of the Utility’s strategy is to rehabilitate existing distribution infrastructure, with 18.3 billion Br committed to strengthening the network. Of the targeted 2,675Km of medium-voltage line rehabilitation, 1,796Km have been completed.

"Achieving mass electrification is impossible without cooperation with international partners such as the World Bank," said Getu.

EEU generated 52.26 billion Br over the last reporting period, achieving 96pc of its target. Its revenues come mainly from energy sales (34 billion Br) and new customer connections (16 billion Br). According to its executives, revenue has almost matched expenditure, which they present as evidence of improved performance. Revenue surged by 119.3pc compared to the same period last year, rising from 23.83 billion Br to 52.26 billion Br, enabling it to cover 81pc of its operating and investment costs.

Ethiopia maintains one of the lowest electricity tariffs on the continent, but phased price adjustments are ongoing.

“We're highly subsidised and operating at a loss,” Getu said.

Unauthorised connections, theft, and line-cutting continue to drain the company, even though it has collected over 949 million Br in penalties for "wasteful power use" and still has 551 million Br in outstanding penalties.

EEU’s total expenditure reached 52.02 billion Br, with less than half allocated to capital projects, including network expansion and infrastructure upgrades. Foreign subsidy is at 16pc where as the federal government keeps providing state allocated three percent for electrification in 63 towns.

Electrification efforts are being driven by off-grid and on-grid services, with 37 mini-grid solar installations totalling more than 95,535Km.

The company has exceeded its transformer maintenance target, servicing 1,175 units against a plan for 758. In the first half of the fiscal year, it purchased 8,790 GWh of electricity from the Ethiopian Electric Power (EEP), another state-owned company.

Expanding the distribution infrastructure into new areas remains a major challenge. EEU targeted 9,880Km of new medium- and low-voltage lines but completed only 48.1pc of its goal. Getu attributed this to high costs, security problems, and capacity limitations. However, the installation of new transformers surpassed expectations, with 2,420 units installed compared to a target of 2,309.

“We perform well in maintenance and installation, but we must do better,” Getu said.

These infrastructure improvements directly support broader operational goals, including reducing technical losses and improving service quality for a rapidly expanding customer base. Nearly 94.8pc of all customers now use digital payment systems, a sign that the company is modernising both its grid and service model.

Getu disclosed that talks with transformer manufacturers that led to import substitution for up to 80pc of units through local production, beating the earlier target of 35pc value addition. Discussions are also ongoing between Ethiopian Investment Holdings, EEP, and the EEU to manufacture high-capacity transformers domestically.

“We don't have a shortage of transformers, but we need more infrastructure,” Getu said. "Customers should be encouraged to use energy-efficient appliances."

However, electric power disruptions remain a problem. According to Getu, the company expects improvements in the next six months as it addresses infrastructure gaps.

PUBLISHED ON Feb 08,2026 [ VOL 26 , NO 1345]