East Africa is undergoing a dramatic transformation in its energy sector, with hydropower at the heart of the region’s clean energy ambitions. Ethiopia is at the forefront of this movement, leveraging its vast water resources to drive energy security, economic growth, and climate resilience—mirroring global trends highlighted in the 2025 World Hydropower Outlook1.

The centerpiece of Ethiopia’s hydropower strategy is the Grand Ethiopian Renaissance Dam (GERD), now recognized as Africa’s largest hydropower facility. By April 2025, GERD had reached 98.66% completion, with six turbines operational and full capacity expected later this year. The dam currently provides 2,150 MW of electricity and is set to achieve a total capacity of 5,150 MW once all turbines are online. In its first ten months of operation, GERD generated over 2,700 GWh of electricity—26% above projections—demonstrating the project’s efficiency and the country’s improved water management.

Beyond domestic supply, GERD is poised to bolster regional energy exports, supporting neighboring countries such as Kenya, Uganda, and Sudan, and strengthening Ethiopia’s position as a regional energy powerhouse.

Ethiopia’s hydropower ambitions extend well beyond GERD. Several major projects are in development, including: Genale Dawa 5 (100 MW) where construction is set to begin with commercial operations expected by 2028 and Halelle Werabesa II (326 MW) located in the Guraghe region, this plant is in pre-construction and will further expand the country’s hydropower output.

These projects align with Ethiopia’s vision to become a major electricity exporter by 2030, supporting both domestic industrialization and regional energy integration.

Ethiopia’s leadership in hydropower reflects a broader global trend. According to the 2025 World Hydropower Outlook, hydropower remains the world’s largest source of renewable electricity, supplying 14.3% of global power. In 2024 alone, global hydropower generation increased by approximately 10% to 4,578 TWh, with installed capacity reaching 1,443 GW1. The sector is also experiencing rapid growth in pumped storage hydropower (PSH), which is crucial for grid stability and integrating variable renewables.

The global pipeline for hydropower remains robust, with over 475 GW of conventional projects and 600 GW of pumped storage projects planned. However, challenges such as climate change, water scarcity, and the need for modernization persist worldwide.

Ethiopia’s leadership is mirrored by hydropower developments across East Africa. Tanzania’s Julius Nyerere Hydropower Plant, now fully operational, delivers 2,115 MW to the national grid, making it the largest in East Africa and the second largest on the continent. Kenya and Uganda are also investing in new hydro projects to meet rising energy demand and diversify their power mix.

However, the region faces challenges from climate change, with recurring droughts and water variability impacting hydropower generation. The World Hydropower Outlook notes that climate change is intensifying competition for water resources globally, making efficient water management and infrastructure resilience critical for future energy security. Ethiopia’s proactive approach in these areas offers important lessons for neighboring countries.

Ethiopia’s hydropower expansion is not only about energy generation. By reducing dependence on fossil fuels, these projects are helping to combat climate change, foster economic development, and promote cross-border collaboration. The interconnected power grid envisioned by Ethiopia and its neighbors is expected to enhance energy security and drive shared prosperity across East Africa.

Globally, hydropower’s flexibility and storage capabilities are increasingly valued for their role in stabilizing electricity markets and supporting the integration of renewables—a trend that is shaping policy and investment decisions from Africa to Asia and beyond.

Visa denial prevents Capital’s reporter from attending TikTok’s landmark summit

TikTok has announced a significant expansion of its global mental health initiatives to Sub-Saharan Africa during its inaugural Digital Well-being Summit in Johannesburg.

The summit brought together policymakers, mental health experts, NGOs, and industry leaders from South Africa, Kenya, Nigeria, Ghana, Ethiopia, and Zimbabwe to discuss strategies for improving digital well-being across the continent.

A key highlight of the event was the extension of TikTok’s USD 2.3 million Global Mental Health Education Fund to Sub-Saharan Africa, marking the first time organizations from the region will benefit from this fund.

These organizations will receive both funding and platform support to create culturally relevant, evidence-based content aimed at raising awareness, reducing stigma, and promoting open dialogue around mental health in African communities.

Building on successful pilots in Europe, TikTok will also launch in-app helpline resources across Africa. In the coming weeks, users in select African countries will have access to local helplines within the app, providing expert support for issues related to suicide, self-harm, hate, and harassment. These helplines will offer counseling, advice, free psychological support, and other essential services.

As part of its commitment to digital well-being, TikTok has introduced a guided meditation experience within its “Sleep Hours” feature.

Automatically activated at 10:00 PM for users under 18, and optional for older users, this feature aims to help users unwind and establish healthier nighttime routines. Research suggests that mindful meditation can enhance sleep quality and emotional regulation, especially for teens navigating the pressures of a hyper-connected world.

According to information obtained by Capital from the event organizers, the summit also highlighted ongoing initiatives like TikTok’s #MentalHealthMatters campaign, which promotes positive mental health practices worldwide. These efforts are designed to support balanced digital habits and provide communities with access to reliable information.

“We commend the private sector’s efforts to foster digital literacy and create a safer online environment for all. Such efforts reflect the collective responsibility of the government and the private sector to inspire creativity, empower communities, and connect young people to the digital world,” said Siviwe Gwarube, South Africa’s Minister of Basic Education, at the inaugural event.

In collaboration with the World Health Organization, TikTok has introduced its first-ever Mental Health Ambassadors from Africa. This diverse group of verified healthcare professionals will share expert advice and relatable content on mental health and emotional well-being.

These initiatives are part of TikTok’s broader strategy to proactively address digital harms through innovation, collaboration, and empathy, aiming to create responsible and empowering online environments for African users.

A Capital reporter, invited by TikTok South Africa to cover the Digital Well-being Summit in Johannesburg for Ethiopian audiences, was unable to travel after the South African Embassy in Addis Ababa denied his visa application, despite the reporter having visited the country multiple times before.

The International Monetary Fund (IMF) projects that Ethiopia’s rapidly growing economy will increase activity at Djibouti’s ports, strengthening the vital trade partnership between the two nations. However, Djibouti is facing significant fiscal pressures due to declining revenues and rising debt, which may hinder long-term growth.

In its latest Article IV assessment, the IMF noted that Djibouti has effectively managed regional tensions, achieving strong economic growth, moderate inflation, and a recovery in foreign reserves. The country’s strategic role in maritime security and humanitarian operations has further enhanced regional stability.

Over the past decade, Djibouti’s GDP per capita has doubled, fueled by extensive infrastructure investments that have modernized its economy. Growth in 2024 is estimated to exceed 6.5%, driven by increased transshipment activity amid disruptions in the Red Sea, while stable global food and energy prices have helped control inflation.

Despite this progress, the IMF warned that declining government revenues and high debt servicing costs have strained public finances, pushing debt to unsustainable levels. While growth remains robust, job creation in the formal sector is still inadequate, and there is diminishing fiscal space for development spending.

Ethiopia’s ongoing economic reforms—such as trade liberalization, market-based exchange rates, and increased foreign investment—are expected to enhance demand for Djibouti’s port services. As a landlocked country, Ethiopia depends heavily on Djibouti’s ports for over 95% of its trade.

“The robust Ethiopian economy is anticipated to boost activities at Djibouti’s ports,” stated the IMF. However, it cautioned that fiscal consolidation and a slowdown in large-scale investments could temper growth in the medium term.

The IMF also identified key risks, including potential regional conflicts that may increase migration and strain social stability, along with trade policy shifts that could weaken the Djibouti franc (pegged to the dollar) and raise inflation, despite enhancing service exports.

In spite of these challenges, Djibouti has shown resilience, successfully navigating multiple shocks in recent years, including the COVID-19 pandemic, the conflict in northern Ethiopia, the war in Ukraine, and disruptions in the Red Sea.

The IMF forecasts that Djibouti’s growth will remain strong at around 6% in 2025, although a gradual slowdown may occur in the following years. Policymakers will need to balance debt sustainability with investments in critical sectors to ensure long-term stability.

Experts suggest that as Ethiopia’s reforms unlock new trade opportunities, Djibouti’s ports are poised to benefit, but maintaining fiscal discipline will be essential for sustaining economic momentum.

More than 860 plastic and rubber manufacturers across Ethiopia, carrying over 12 billion birr in unpaid debts to banks and microfinance institutions, are confronting serious economic and social challenges following the enactment of Proclamation No. 1383/2017 on solid waste management and disposal.

The Ethiopian Plastic and Rubber Manufacturers Sector Association (EPR) expressed support for the environmental goals of the new law but raised concerns about the short six-month implementation period mandated after its publication in the Negarit Gazette. The association warned that this rapid transition could push many local producers—already burdened with significant debts—toward bankruptcy.

Speaking at a stakeholder meeting held at Ghion Hotel, the association’s general manager highlighted that the proclamation lacks clear alternative exit strategies for manufacturers who may be forced out of the sector. This omission, he cautioned, could result in substantial economic, social, and environmental losses not only for the producers but also at the national level.

The decree also fails to provide detailed guidance on replacing “single-use plastics” with sustainable alternatives within the tight six-month timeframe, leaving manufacturers without an adequate transition period to adapt their production processes.

Despite these concerns, the association affirmed its commitment to comply with legal provisions banning the production and marketing of problematic plastic products, such as low-density plastic bags and certain packaging materials that are difficult to collect and contribute to urban pollution.

The plastics sector plays a significant role in Ethiopia’s economy and environmental efforts. According to the association, it contributes over 51.6 billion birr annually to the national economy, saves more than $391 million in foreign exchange, and provides employment to over 268,000 people—predominantly women and youth with limited formal education. Additionally, the sector generates more than 10 billion birr annually in taxes and service charges paid to the government.

However, the new proclamation poses risks of substantial financial and asset losses. The association estimates that machinery valued at over $248 million could become stranded if manufacturers are forced to cease operations. The sector’s registered investment capital stood at more than 58.8 billion birr in 2022.

Under the Solid Waste Management and Disposal Proclamation, individuals found in possession of single-use plastic bags face fines of up to 5,000 birr, signaling strict enforcement measures.

A recent study further highlights the precarious position of plastic manufacturers, many of whom owe more than 12 billion birr in outstanding loans. The decree’s implementation is expected to increase financial pressures, especially as manufacturers may need to invest heavily in new machinery and raw materials to produce sustainable alternatives, potentially requiring over $760 million in foreign exchange in the short term.

In light of the sector’s substantial contributions and current challenges, the Ethiopian Plastic and Rubber Manufacturers Sector Association has called on government bodies to engage in extensive consultations regarding the proclamation’s implementation. The association urges the establishment of appropriate transition periods and exit strategies to mitigate economic fallout and support sustainable industry transformation.

As Ethiopia advances its environmental agenda, balancing ecological goals with economic realities remains critical to ensuring that vital industries and the livelihoods they support are not unduly harmed.