Global Insight Perspective | |
Significance | Some 1,180MW will be added to Ethiopia's national grid in early 2009 when three new hydroelectric power plants come onstream. |
Implications | The Ethiopian government has set out a policy to increase electrification to 50% of the country by 2010, at which point it hopes to be exporting electricity to Sudan and Djibouti |
Outlook | The government has a coherent policy to exploit its vast renewable energy potential, but may need to attract extra investment from private partners than to continue to rely on the donor community, and should also have contingency plans create a more balanced generation mix. |
New Hydroelectric Power Projects
Mihret Debebe, general manager of the Ethiopian Electric Power Corp. (EEPC), the state firm that controls generation, transmission, and distribution. says that Ethiopia has vast potential to generate hydroelectric power, which will not only allow for massive expansion of generation capacity and bring electrification to most of the country, but will also allow for the export of power to neighbouring countries, thereby earning the EEPC foreign currency. At present, only 20% of Ethiopians receive electricity and the country generates 800MW of power. A series of new hydroelectric power (HEP) projects are due onstream in early 2009. These include the Takeze (300MW), Anabeles (460MW), and Gilgel Gibe 2 (420MW). These three new projects will more than double Ethiopia's generation capacity, bringing an additional 1180MW. The Beles HEP is set to cost 5.4 billion birr and will utilise the Belesa River; the facility will be located 370 km north-west of the capital, Addis Ababa. The Tekeze HEP project on the Tekeze River in the north of the country is being developed by the China National Water Resources and Hydropower Engineering Corp. (CWHEC), at a cost of US$350 million. Both the Beles and Tekeze projects have been designed to not only generate electricity, but also to supply water for both residential and agricultural use in the region. In addition, three hydropower projects have been completed over the past decade: Tis Abay 2 (80MW), Finchaa 4 (34MW), and Gilgel Gibe (184MW).
The EEPC is operating under a new motto: “empowering Ethiopia into a new millennium”. The government has set an ambitious target of increasing the electrification figure to 50% of the 77-million population by 2010 at a cost of 100 billion birr (US$11.7 billion). The World Bank loaned Ethiopia 2 billion birr (US$230 million) in July to expand electricity across 295 towns, which should benefit 1.8 million people. Debebe also hopes to add wind and geothermal power stations during the next eight years as the country aims for "total electrification…by 2015". Local newspaper the Reporter states that the EEPC wants wind turbines placed in Adama and Mekelle and to mine coal from Yayu in west Ethiopia. It is vital that the country develops more thermal power plants to create a more balanced generation mix to rely on during the dry season and droughts.
Exporting Power to Neighbouring Countries
Alemayehu Tegenu, the Minister for Mines and Energy said that the new HEP projects will enable the country to sell electricity to neighbouring countries. This ambitious strategy includes supplying power to Sudan, Djibouti by 2010, and Kenya by 2011.
The EEPC intends to install a double-circuit, electric, power-transmission line that will carry 230kV over 296 km from Bahir Dar to the Sudanese border town of Shehedi, and a new transmission line is being developed to link Shehedi with Gedaref in Sudan, costing US$68 million and due for completion in 2010. This will enable Ethiopia to earn US$30 million a year for the export of 200MW of hydropower to its neighbour.
Ethiopia is also implementing plans to allow it to export electiricty to Djibouti and Debebe said that the EEPC expects to earn US$40 million revenue annually and some 36,000 people will benefit from the agreement when it is completed in 2010. According to the Reporter, the project will generate 230kV from the distribution centre in Dire Dawa, which will then travel by a 283-km line to Djibouti. Precisely 201 km of that line will be in Ethiopia, with the remaining 82 km in Djibouti. The African Development Bank is providing US$61.6 million of the development costs. Two distribution substations will be constructed in Dire Dawa and Adigala, Ethiopia, and another two will be in capital city, Djibouti, and in Ali Sabeh. The towns of Aisha Dewale, Harewana, and Adigala in Ethiopia and Djibouti city and Ali Sabeh will be the project's end-user locations.
Outlook and Implications
Two years ago, the Ethiopian government came up with a 25-year strategic plan to expand electricity across the country and exploiting 30,000MW of hydropower is the fulcrum of the initiative. In addition to the three new HEP facilities due onstream in the near term there are also plans for the construction of the 100MW Amerti-Neshe and the 367MW Halele-Werabesa hydropower stations, and Italy's Salini Construction firm signed a deal with EEPC to build a US$1.75-billion (14-billion-Birr) hydropower plant known as the Gilgel Gibe III project on 19 July 2006. The Gibe III project is being funded by the Ethiopian government, the European Investment Bank, the African Development Bank, and through the contractor's equity (see Ethiopia: 21 July 2006: Italian Firm Sign Deal with Ethiopia to Construct New Hydropower Plant). According to the Ethiopian Herald, the co-ordinator for the project, Mebratu Teshone, said that construction of the dam, tunnel, distribution, and water-diversion works are under way, and the facility should be operational in 2013, when it will generate 1,870MW. It is the third cascade power project on the Omo-Gibe river. Claudio Lautizi, managing director of Salini, has described Gibe III as the largest hydropower project currently under construction in Africa. Lautizi believes that, for Ethiopia, hydropower is the equivalent of crude oil in many other African countries, and that it has vast "white oil" potential.
It is sensible that the government should try and exploit Ethiopia’s vast hydropower potential and, by having a clear strategy, should be able to export electricity to neighbouring countries by 2010, thus earning the country valuable foreign currency. However, Ethiopia's main problem is how to fund the next generation of power stations: the government prefers a public-private partnership basis, which means looking for help from the International Monetary Fund and European Union, and not relying too greatly on private partners However, the donor community is urging the government to heed the African Development Bank's advice and encourage independent power projects.