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Unlocking Forex for the Off-Grid Solar Sector Ethiopia: Policy Brief

 

Ethiopia has set a target of creating access to electricity for 9 million households through the standalone solar (SAS) systems by 2025. It is an ambitious but achievable target if existing constraints can be tackled. The main challenge affecting private businesses and households’ access to Off-Grid Solar (OGS) is lack of access to forex for the import of solar products. The World Bank/Development Bank of Ethiopia (DBE) credit facility has to some extent alleviated this problem by extending working capital loans to Private Sector Enterprises (PSEs) for the importation of solar products until the fund was depleted in 2019. With the universal electrification target date fast approaching, a policy shift is required to address the forex challenge.

This brief explains the potential solutions for the forex constraint in Ethiopia.

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