Teshome Toga, the Ambassador of the Federal Democratic Republic of Ethiopia, visited IEPPA and held discussions about cooperation.
With the improvement of infrastructure and the increase of demands in the energy field, the Federal Democratic Republic of Ethiopia nowadays has become one of the most fast-growing economies in Africa.
On June 11th, 2020, Teshome Toga, the Ambassador of the Federal Democratic Republic of Ethiopia to China, together with the Minister, Asaye Alemayehu, as well as the First Secretary, Yonathan Ghebremedin Simon, visited the International Ecological Economy Promotion Association(IEEPA). The Acting Vice President, Li Junyang, met with the delegation. They exchanged ideas on cooperation in the fields of clean energy, infrastructure construction, ecological city planning, etc.
According to Teshome Toga, since the reform and opening up, China's economy has developed rapidly for 40 years, which can be a valuable learning experience for Ethiopia. Ethiopia had not paid much attention to the ecological development of enterprises in the past, however, they have realized the importance of ecological developments and bewared that they must adopt a model of sustainable developments, aiming at enhancing the ability to cope with ecological restoration and climate changes. Currently, Ethiopia is using clean energy for power supply and has set a goal of achieving zero emission by 2025.
During the meeting, Teshome Toga said that there are many Chinese enterprises in Ethiopia, especially in the field of energy, where opportunities and challenges co-exist. Meanwhile, Ethiopia is gradually incorporating the concept of sustainable development into businesses in hope of environmental protection. The government is adjusting approaches to achieve a win-win situation for both business explorations and sustainable developments. So far, Ethiopia has provided one-stop services for foreign-invested enterprises, bringing opportunities for investments to Ethiopia's neighboring countries, including Djibouti, Sudan, etc. Witnessing great potentials in the energy market of Ethiopia, the government supports the developments of the renewable energy industry and welcomes investments from private capitals and public-private joint ventures. In the five-year plan of Ethiopia for energy developments, renewable energy will be used to increase the national electricity supply by 2020. This is what Ethiopia has committed to climate changes. Among all, hydro-power will be developed as the main energy channel in Ethiopia. Meanwhile, considerable amount of wind energy, geothermal energy, solar energy and biomass energy will also be explored in the near future. In terms of investment models, Ethiopia carries out infrastructure construction with the cooperation of the government and social capital ("PPP" for short). Ethiopia promulgated thelaw of PPP in February 2018, promoting investments and financing models in social infrastructure.
According to the Acting Vice President of IEEPA, Li Junyang, economical developments require the enthusiasm of the public, while the synergetic relationship between environmental protection and economic developments requires the positive guidance of the government . Furthermore, the ultimate goal of economical prosperity is to nurture the good nature of man, which should always be seen as the fundamental motivation. From the perspective of market, Li had two main suggestions as to Ethiopia's economic developments. Firstly, at the beginning of policy-making, the government needn’t formulate economic policies which are too detailed and specific. The key is to encourage the market to take a first try and then gradually implement relevant regulations. If there were too many constraints in the first place, the vitality in the market will be reduced and the development of economy will be stunted. Secondly, it is necessary to make an overall plan for the environment, energy, minerals, etc. Moderate explosion and proper application is very important, because the resources belong to its country and people. Resources within the country can cater to the basic need for survival and production, as well as provide a living environment. Environmental protection and Ecological maintenance is the top issue, therefore, certain controls and management must be taken by the government. China used to take the wrong path of "pollution first, treatment next". For example, the policy of mining in the past was focused on exploitation instead of protection, which caused serious consequences afterwards. This wrong experience can be a useful lesson for Ethiopia.
To Li’s belief, although great potentials for investment can be found in the field of infrastructure construction and urban planning in Ethiopia, China has encountered certain problems with the PPP model when investing and providing finances. The PPP model focuses on the sustainability of local finance, which can later assure the sustainability of joint ventures with private enterprises. However, from a practical perspective, it is easier said than done. Difficulties in management can bring certain instability. For instance, because the return of funds cannot be guaranteed, some contracts cannot be executed according to the previous agreement and many private enterprises end up with bankruptcy. Therefore, PPP may not be the most ideal model for investment and financing. However, as to enterprise developments, it seems unnecessary to stick to one certain model, because the market should be the key element in decision-making, given that sustainability and stability of projects should count the most.
Teshome Toga expressed his appreciation for Li Junyang’s suggestions. He concluded that what Ethiopia has done is aimed at improving business environments. Teshome sincerely invited the members of the International Ecological Economy Promotion Association to visit Ethiopia in the future and look for new opportunists for cooperation after epidemic ends.
In the end of meeting, the two sides agreed for achieving the win-win development of the economic and environment by cooperation between the two countries. The delegation of IEPPA will look for opportunities to visit Ethiopia in the near future.