Monday, November 12, 2012

Ethiopia on track to complete first mega-dams by 2015-minister,0,6946904,full.story

Ethiopia on track to complete first mega-dams by 2015-minister


November 12, 2012

* Mega dam along Nile River to generate 6,000 MW

* Plans to spend over $12 bln and produce 40,000 MW by 2035\

* Hopes to become Africa's biggest power exporter

By Aaron Maasho

ADDIS ABABA, Nov 12 (Reuters) - Ethiopia's energy minister
played down concerns on Monday about how it would finance the
first of an array of mega-dams due to revolutionise east African
power markets, saying it was on track to have three plants on
line by 2015.

The Horn of Africa country has laid out plans to invest more
than $12 billion in harnassing the rivers that run through its
rugged highlands to generate more than 40,000 MW of hydropower
by 2035, making it Africa's leading power exporter.

Energy chief Alemayehu Tegenu said the plan's centerpiece -
the $4.1 billion-Grand Renaissance Dam along the Nile River in
the western Benishangul-Gumuz region - was on course to be
completed on time in 2015.

Two other smaller dams should also come on line by that
point, he said, generating a total of more than 8,000 megawatts
of power at full capacity.

"Everything is going according to plan. It (the Grand
Renaissance) is on good status," Tegenu told Reuters in an
interview on the sidelines of an energy conference in Addis

"So far we have achieved 13 percent of the total construction."

The dam - Africa's largest - will generate 6,000 MW at full capacity.

It is just the latest of a series of ambitious infrastructure projects
launched by Ethiopia following years of
solid economic growth. The government says funding will come
from both domestic and foreign sources.

Worried about the state's ability to raise the billions
needed, however, some experts have called on Addis Ababa to sell
off state firms and assets they say could rake in a potential
$9.6 billion.

Alemayehu said the country has raised more than 5 billion
birr ($277.1 million) for the construction of its Grand
Renaissance Dam to date, the vast majority of it from sales of
government bonds.

"This dam may not be constructed only by selling bonds, but
the (power) utility can finance some part of the financing," he said.

"The option we have designed is financing by the people of
Ethiopia, the utility and the government."

The other major near-term project the government hopes to
complete is the Gilgel Gibe III dam along its southern Omo
river, set to generate 1,870 MW from the end of 2013 at a cost
of $1.8 billion.

Alemayehu said over 65 percent of construction on that dam
had been completed.

Another 254 MW project is being built in the Oromiya region
and is due to be ready in two years. Together the three projects
will churn out 8,124 MW, compared to Ethiopia's existing
capacity of around 2,167 MW of hydro and wind power.


Egypt fears that the Nile dams will reduce the flow of the
river's waters further downstream and Addis Ababa has long
complained that Cairo was pressuring donor countries and
international lenders to withhold funding.

An international panel of experts is set to announce its
findings on the impact of Ethiopia's Grand Renaissance Dam on
the Nile's flow in May 2013.

Analysts suspect that any shortfall in funding of such
projects could draw further Chinese capital to Africa, where
Beijing has begun to accumulate natural resources and volumes of

Critics have already slammed China's willingness to lend
money for Gilgel Gibe III's turbines over concerns the dam would
create serious environmental damage.

Addis Ababa is already providing more than 50 MW to
Djibouti, while Kenya's border town of Moyale is importing a
small amount.

"We have started exports to Sudan, as well as the border
town of Moyale. We will gradually expand to Sololo (in eastern
Kenya) and plans for Somaliland are also going well," Alemayehu

Newly-independent South Sudan has also signed a memorandum
of understanding to construct a transmission interconnector to
import power, he added.

Another project - a 3,000 km 500 kV line linking Ethiopia
with Sudan and Egypt, is also in the pipeline, while the
construction of a 1,300 km 500 kV transmission interconnector
with Kenya will start soon.

"We have secured the finances (for the project linking with
Kenya) and the design has been complete. For construction the
tender has also been floated," Alemayehu told Reuters.

"The project is expected to start in less than two months."

(Editing by Yara Bayoumy and Patrick Graham)

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