Ethiopia - Hydropower may replace coffee as biggest export

ADDIS ABABA, 12 Jan. 2008 -. Ethiopia may build as many as nine hydropower plants over the next 10 years, making electricity rather than coffee the Horn of Africa nation’s biggest export.

"There is a deficit around our neighbors," Mekuria Lemma, head of the programme planning department at the state owned Ethiopian Electric Power Co., said on Thursday in an interview in the capital, Addis Ababa. "If we are successful in doing this, power will be our biggest export."

Ethiopia is building five hydropower dams by 2011 with a total generating capacity of 3,150 megawatts and is considering spending 3,2 billion euros (US$4,7 billion) on four more, Lemma said.

The aim is an 11fold increase in capacity to 9,000 megawatts by 2018 with surplus power exported to neighboring Kenya, Djibouti, and Sudan.

Gibe IV, the largest of the four new projects, would cost about 1,9 billion euros and generate 2 000 megawatts. A feasibility study for Gibe River dam in southern Ethiopia should be finished by the middle of the year, Lemma said.

Ethiopia is seeking finance for three of the four proposed projects while the UK and Ireland based FairFund Foundation will help fund the 470 million euro Halele Worabese dam on a tributary of the Gibe. FairFund declined to disclose the size of the notforprofit organization’s investment.

Italy ’s Salini Costruttori SpA is building three of the five dams currently under construction, including the US$1,7 billion Gibe III, which will generate 1,870 megawatts, Lemma said.

Ethiopia has initial agreements to export 200 megawatts to Djibouti, 500 megawatts to Kenya and 200 megawatts to Sudan when the five dams under construction are completed. It will also consider a 26-kilometre undersea transmission line for exporting electricity to Yemen via Djibouti.

A feasibility study on theUS$196 million project to connect Ethiopia and Kenya with transmission lines should be finished within the next two months. Those lines may eventually link Ethiopia’s hydropower plants to the 12-nation Southern Africa Power Pool via Tanzania.

Source: Bloomberg