Report Finds Renewable Energy to Be the Least Popular Sector for Startups in Addis Ababa

A recent study that sheds light on the startup landscape in Addis Ababa has found that the renewable energy sector is the least popular area for startups in the capital.

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The study conducted by the Japan International Cooperation Agency (JICA) and the Ministry of Innovation & Technology (MInT) in collaboration with Shega surveyed over 300 startups, found only 10 startups currently engaged in the renewable energy sector, making it a significantly underrepresented field.

The green energy sector is closely trailed by on-demand services, with only 17 startups operating within this field.

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The report, titled Addis Ababa Startup Ecosystem Report 2023 attributes the limited presence of startups in renewable energy to the absence of supportive policies and regulations that encourage the growth of such businesses.

“While renewable energy holds immense potential in Ethiopia, the sector demands substantial investment. Many entrepreneurs may be hesitant to invest in a relatively new industry with high capital requirements and uncertain returns,” states the report.

Some of the renewable energy startups in operation in Ethiopia include Fibermart Trading Company, Alif Energy, Zafree Papers, Abramba Technologies, Green Scene Energy, Green Sun Deventus, Husky Energies, and Coffee Resurrect, among others.

In contrast, sectors such as delivery, logistics, and e-commerce have gained significant traction among startups. The report suggests that this trend is influenced by the increasing digitization practices adopted in Ethiopia, especially since the onset of the COVID-19 pandemic. Meanwhile, sectors like health-tech, ed-tech, agri-tech, and fintech boast a comparable number of startups.

According to the report, these sectors have experienced substantial growth in recent years, and this upward trajectory is expected to continue.

Click here to read the full report,