For least developing countries with large rural population living in severe poverty such as Ethiopia, access to modern and sustainable energy services is a real challenge. Dealing with the lack of modern energy services at local level and the needs for economic development at national level is a major challenge in the policy and decision making process. This particular study takes the case of Ethiopia to investigate the existing challenges and future prospects of mainstreaming sustainable energy access into the country’s development planning process, and the consequences for international development financiers, national policy makers, private actors and local energy planners and experts. The roles and approaches of various developmental agencies are reviewed based on the effectiveness and sustainability of cooperation models with governmental institutions. To this end, this study establishes an understanding of institutional, financial and policy elements related to both state and non-state actors. Accordingly, readiness of the rural energy sector to adopt sector–perspective and national development approaches to mainstream sustainable energy access is investigated. The thesis emphasizes the need for all stakeholders to cooperate and take advantage of local potentials and external opportunities in light of the new momentum for sustainable energy access in the global agenda.