Ethiopia has a population of over 100 million people, the majority of which reside in rural areas with low rates of energy access. As part of an effort to encourage economic development and expand modern energy services, Ethiopia’s second Growth and Transformation Plan (GTP II) set a target of importing 3.5 million solar lanterns and 500,000 solar home systems by 2020. To date, the Government of Ethiopia has taken many important steps to diffuse quality products into the market, including adopting mandatory standards aligned with the Lighting Global Quality Standards. All pico-solar products imported into Ethiopia must demonstrate compliance with national standards. However, in-country conformity assessment processes and invoice guarantee payment requirements hindered previous efforts to deploy high-quality products across Ethiopia. To address these barriers, the Government of Ethiopia, with support from Lighting Global, lifted local quality inspections on September 27, 2018 and established a Pre-Export Verification of Conformity (PVoC) procedure for all pico-solar imports into Ethiopia that promises to deliver benefits for importers, domestic consumers, and the Ethiopian economy.
PVoC is an inspection and verification procedure applied to a specific set of goods entering a country. PVoC procedures work to ensure all imported goods meet a set of specified quality, safety, health, or environmental standards. They also facilitate international trade by streamlining the importation process. PVoC requires that products be inspected prior to shipment to ensure compliance with applicable standards in the destination country. This encourages the export of quality products: companies that comply with PVoC requirements experience faster clearance through customs. When successfully implemented, PVoC procedures help countries import high-quality products and prevent the entry of poor-quality or counterfeit products that may contribute to market spoilage.
Prior to September 2018, solar equipment importers were required to pass shipments through conformity assessment procedures at customs clearance points in Ethiopia. Local inspection of imported equipment, coupled with capacity limitations of laboratories, often led to disruptive delays and fees for importers. By implementing PVoC requirements for solar equipment imported into Ethiopia, the government intends to reduce delays in customs and build confidence in the Ethiopian economy. Ethiopia’s PVoC procedure is expected to encourage a smooth flow of trade between Ethiopia and other countries and prevent uncontrolled influx of poor-quality products that dampen investor confidence and discourage direct investment. PVoC procedures are also used to harmonize trade practices across regions. To date, Kenya, Tanzania, and Uganda have all implemented PVoC programs for solar imports.
Many stakeholders are already reporting the benefits of Ethiopia’s PVoC process. Associates of the IFC Lighting Ethiopia program have indicated that the PVoC procedure does, in fact, facilitate importation of quality-verified products into Ethiopia. Similarly, non-associate companies are obliged to consider importing quality-verified solar products. Government officials have also realized the benefits of PVoC. Ethiopia’s Ministry of Trade and Industry has confirmed that the new PVoC regulation has improved the importation procedures, and complaints from the private sector have significantly decreased.
While still in its early stages, Ethiopia’s efforts to reduce import barriers for high-quality products though PVoC signal the government’s commitment to developing a healthy market and building consumer confidence in off-grid solar equipment. To ensure a smooth transition, Lighting Global continues to work with private sector companies operating in Ethiopia to familiarize them with the new PVoC procedure and its requirements.