Ethiopia to build new dam at a cost twice the amount spent on renaissance dam with money from China


Ethiopia to Contract Most Expensive Dam Ever

Ethiopian Electric Power (EEP) to award a contract to build a dam on Gebba River, whose cost per megawatt (mw) is twice the amount spent on the Great Ethiopian Renaissance Dam (GERD)
The Ethiopian Electric Power (EEP), a state monopoly tasked with the investment, expansion and operations of a generation as well as transmission of electric power, is to award a contract to build a dam on Gebba River, whose cost per megawatt (mw) is twice the amount spent on the Great Ethiopian Renaissance Dam (GERD), sources disclosed.
Although last minute negotiations were still underway at the time of going to press, a joint venture arrangement between Chinese and Ethiopian companies is to get hired to build the dam planned to generate 391mw electric power, sources disclosed to Fortune. The company, which has been unbundled recently from its predecessor, the Ethiopian Electric Power Corporation (EEPCo), has selected SINO Hydro and CGCC, Chinese construction firms active in Ethiopia, to work with SUR Construction and Oromia Water Works Enterprise (OWWE), according to these sources. Nonetheless, while the involvement of the first three companies has been confirmed by officials of the company, these officials have declined from confirming the participation of OWWE in the project.

EEP’s Chief Executive Officer, Azeb Asnake, is expected to sign the contract worth over 700 million dollars (over 14 billion Br) at the Hilton on Monday, September 8, 2014. The 12th dam in the country and first after the launch of the GERD, Geba Dam will consume more investment than any of the 11 dams that preceded it. The most expensive dam to date was put on Tana-Beles, with 15.4 million Br for a megawatt while Gebba will consume over 35 million Br, according to reliable sources. GERD is projected to take a little over 14 million Br for a megawatt electric power generation when it gets completed in 2017, according to the plan.
“GERD has economy of scale,” said an expert with vast experience in the industry.

To be built on Gebba River, near the border between Jimma and Illubabur zones of the Oromia Regional State, the cost is to be financed with a loan provided by the Chinese government, these sources disclosed. The life of the project comes a long way since its inception in 2005, where the World Bank and African Development Bank (AfDB) had shown interest to finance part of the 535 million dollars project at the start. AfDB had sent a team of appraisal two years to determine the feasibility of the project and its impact on the environment, with the hope that AfDB would provide a 100 million dollar loan.
“With AfDB only providing a loan of 100 million dollars, the difference will have to be covered by the Ethiopian government and other financiers,” Lamin G Barrow, resident representative of AfDB at the time, had told Fortune.

Addis Fortune