Thursday, January 12, 2012

Ethiopia's 'grand dam' rouses citizens, dismays critics

Ethiopia's 'grand dam' rouses citizens, dismays critics
In April, Ethiopia's Prime Minister Meles Zenawi announced plans to
build Africa's largest hydropower plant along Blue Nile river. The
project is popular, but lack of transparency is a concern.

By William Davison, Correspondent / January 12, 2012

Addis Ababa, Ethiopia

In the western fringe of Ethiopia on the banks of the Blue Nile river,
the nation's Prime Minister Meles Zenawi thundered that the country
would overcome all obstacles to complete Africa's largest hydropower

"No matter how poor we are, in the Ethiopian traditions of resolve,
the Ethiopian people will pay any sacrifice," he said. "I have no
doubt they will, with one voice, say: 'Build the Dam!'"
The government portrays the dam as a 5,900-foot long, 475-foot high
beacon of progress that will banish the country's reputation for
famine and dependency. The $4.8 billion Grand Ethiopian Renaissance
Dam will lift the country out of poverty, the government argues, by
electrifying the country's industrialization and making Ethiopia a
regional power-hub - and all without a drop of the aid Ethiopia is
synonymous in the West for.

But critics worry that the country may have taken self-sufficiency and
ambition a bit too far in the way it pushed ahead with its largest-
ever project unilaterally and with little transparent planning.

Secrecy has shrouded the 5,250-megawatt plant, nearly 20 miles from
the Sudanese border. Although the site was identified in 1964, the
decision to go ahead with what had been known as Project X became
public less than a month before construction began on April 2.

Its unveiling shocked a host of interested parties.

At a launch in Addis Ababa, the Egyptian embassy's spokesman was
astonished to learn a reservoir more than twice the size of Singapore
would be created by a barrage Cairo had not been consulted on. Over
four-fifths of the water for the Nile, Egypt's lifeblood, comes from
Ethiopia's highlands, leading to historic tensions over usage.

Also uninformed was the Eastern Africa Power Pool, which was just
putting the finishing touches on a regional integration study that
leans heavily on exported Ethiopian hydropower. "We look forward to
getting more information so we can factor it into our master plan,�
Jasper Oduor, its Executive Secretary, said.

Similarly, the unilateral move was a blow to the Nile Basin
Initiative, which is supposed to establish cooperative management of
the river, and Norwegian consultants whose ongoing studies on a
potential cascade of Blue Nile dams were rendered obsolete by the

The covert approach may have had the twin purposes of minimizing
foreign opposition to the scheme while maximizing the impact of its
announcement on Ethiopians - if so, it seems to be working.

Since Meles' speech, the public has been bombarded with
advertisements, posters, reports, and speeches about the dam, as the
state sells bonds to partially fund it. Most of a patriotic citizenry,
who consider Egypt's domination of the Nile an acute injustice,
approve of the scheme - even opposition politicians.

"We need this resource to lift people out of the abject poverty we
have been wallowing in for centuries,� former member of parliament
Temesgen Zewdie says. �There�s no question it�s an idea the Ethiopian
people support.�

The popular cause combined with the ruling party's extensive influence
- around 1 in every 17 Ethiopians is a member - has made for a highly-
effective fundraising campaign. Often following a collective decision
at staff meetings, public and private sector workers have bought
bonds, taking the total raised to 7 billion Ethiopian birr ($408
million) in September, according to Bereket Simon, a longstanding ally
of Meles and co-head of a GERD Public Mobilization Council.

Some, such as former president and leading opponent of the government
Negasso Gidada, say the hype and pressure of the campaign makes it
very difficult for people to opt out. However, the attitude of a lady
selling a handful of vegetables on the streets of one of Addis Ababa's
most dilapidated districts is typical: "I would give more money if
could afford to." So far, she has donated 30 birr (equivalent to $1.73).

The populist approach may alarm Western liberals, but unity in pursuit
of national goals is key to Meles' "developmental state."

The bond-buying will also foster a savings culture, Bereket hopes. At
less than 10 percent of gross domestic product, national savings are
under half the rate that funded the investment of much-admired Asian

So far, no friction with the two downstream nations, Sudan and Egypt,
has resulted. A joint committee between the three countries has been
set up to study the dam, which Ethiopia insists will benefit all by
generating electricity for the region and reducing evaporation due to
its deep, elevated reservoir. Indeed, such are the mutual gains,
Sudan and Egypt should rightfully cover half the costs of the project,
Meles believes. Despite the cordiality, given the political
instability in Khartoum and Cairo, relations could rapidly deteriorate.

The Grand Ethiopian Renaissance Dam also has its detractors and dangers.

The Economist claims a flaw is that export deals have not been struck.
However, links with Djibouti, Sudan, and Kenya are complete or
underway, and the dam's scheduled 2017 completion date gives the power
pool time to advance regional integration.

Also of concern is whether the government will conduct thorough
technical studies and environment and social impact assessments.
Institutions like the World Bank require them. But government
supporters consider these types of activities unacceptable conditions
imposed by a hypocritical, carbon-emitting West - not responsible due
diligence. Unconditional Chinese funds are much-preferred.

Although the desire to be unshackled is admirable, the impatience
could be costly. At the GERD site buzzing with construction activity
in late June - 3 months into the project - an Italian engineer
explained his team were surveying the rock edifices the dam will bind
to. Yes, it was possible they would be found unsuitable, he casually

For International Rivers, which works "to stop destructive dams," the
project is following worst international practice. "No-bid contract,
an air of secrecy, and repression of debate. Such a flawed planning
process could doom the project from the start," says its Africa
campaigner Lori Pottinger.

There's also concern about how the country will pay for the dam given
it will cost around 70 percent of this year's government budget.
Optimists such as Ernst and Young's Zemedeneh Negatu say continued
double-digit economic growth will make it affordable. Private banks,
which have been forced to lend to the government for development
projects, will be an important source of funds.

But the former World Bank country director Ken Ohashi says a need for
foreign loans to finance Ethiopia's ambitious infrastructure projects
could lead to debt problems. To the guffaws of a parliament containing
one opposition member, Meles dismissed the concerns as the parting
shot of a disgruntled neo-liberal.

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