UK's Gridworks Inks $400M Ethiopia Power Deals as Foreign Minister Visits to Address Migration Pressures
ADDIS ABABA, Feb 2 (Reuters) – In a move signaling deeper economic engagement with the Horn of Africa, British government-backed investor Gridworks finalized agreements on Monday to develop and fund two critical electricity transmission projects in Ethiopia, with a combined value of approximately $400 million. The signing coincided with a diplomatic visit by UK Foreign Secretary Yvette Cooper, underscoring a strategic link between infrastructure investment and addressing the root causes of migration.
The agreements represent a significant milestone for Prime Minister Abiy Ahmed's administration, marking the first public-private partnerships (PPPs) for Ethiopia's national transmission network. This aligns with the government's gradual shift to open segments of its state-dominated economy to private capital, particularly in energy infrastructure.
The first project will connect Ethiopia's under-electrified Somali region to the central and northeastern grids, enhancing domestic energy security. The second is designed to unlock renewable energy potential in the northeast, facilitating new wind and solar plants while strengthening the power interconnection with neighboring Djibouti—a key trade gateway for landlocked Ethiopia.
"Reliable transmission infrastructure is the backbone of economic growth, job creation, and improved livelihoods," said British Ambassador to Ethiopia, Darren Welch, in a joint statement. "These projects are pivotal to harnessing Ethiopia's vast renewable resources."
Ethiopian Finance Minister Ahmed Shide echoed the sentiment, noting the projects would "bolster industrial growth through a more stable power supply" and accelerate electrification for millions of households still lacking grid access.
The UK government also committed up to £17.5 million ($23.91 million) in technical assistance to bolster Ethiopia's public investment and asset management systems, aiming to improve the framework for future foreign investments.
Broader Context & Migration Link
Cooper's trip is viewed as part of a wider UK effort to use economic and job-creation initiatives to address migration pressures. The British Foreign Office noted that around 30% of individuals crossing the English Channel in small boats over the past two years were nationals from Ethiopia, Eritrea, Somalia, and Sudan.
Successive UK governments have grappled with illegal immigration, a politically charged issue that has fueled the rise of populist campaigns. The current administration is attempting to frame strategic infrastructure investment as a long-term component of its migration strategy.
Expert & Public Reaction
Dr. Anya Sharma, Development Economist at the Global Policy Institute: "This is a pragmatic, if overdue, model for engagement. Directing investment into foundational infrastructure like energy grids can stimulate local economies and create alternatives to migration. The PPP structure is crucial for transferring technical expertise."
Marcus Thorne, retired diplomat and Africa analyst: "While the economic logic is sound, linking it so explicitly to migration policy is a double-edged sword. It risks making vital development aid appear transactional and could raise expectations in London for immediate results on a complex, multifaceted issue."
Sarah Jenkins, spokesperson for 'Justice for Migrants' advocacy group: "It's cynical to dress up investment deals as a solution to a humanitarian crisis. People flee conflict, persecution, and poverty—a single transmission line won't change that overnight. This feels more like a headline-grabbing attempt to distract from failing asylum policies than genuine, needs-based development."
Daniel Ogbe, energy consultant based in Nairobi: "The focus on transmission is spot-on. Ethiopia has immense generation potential, especially in renewables, but its grid is a bottleneck. Strengthening it, particularly with cross-border links, is key to regional energy integration and stability."
($1 = 0.7320 pounds)
(Reporting by Dawit Endeshaw; Writing by Vincent Mumo Nzilani and William Schomberg; Editing by Hugh Lawson, Alexander Winning and Sharon Singleton)