Ethiopia has ambitious plans to develop its hydro potential to power its own soaring demand and play a leading role in a planned regional grid. Officials argue that they can supply the region without adverse effects on water supply to neighbours downstream, writes Thalia Griffiths in Addis Ababa.
Ethiopia marked the Coptic Millennium on 12 September with mass celebrations in the capital and promises of infrastructure development to lift the country out of poverty. Key to this is energy, where Ethiopia wants to harness some of its 45,000MW of hydropower potential to power its own development and supply the region.
Four new HPP projects are under construction with total capacity of 3,100MW; they have the potential to transform the power supply of a country whose present installed capacity is only some 800MW.
The first three HPPs are due on line by end-2008, with the fourth – Gilgel Gibe III – due to add 1,870MW in 2011 or 2012. Italy’s Salini Costruttori has been awarded the construction contract and preliminary work has begun, although the government is still looking for funding (AE 119/10).
Salini is also building the 160MW Beles dam on the south-west shore of Lake Tana, the source of the Blue Nile, north-west of Addis Ababa. Work began in 2005 on this project.
The Italian company built the first 183MW stage of the Gilgel Gibe development, which came on stream in November 2003, and is now building the 420MW Gilgel Gibe II, with financing from the Ethiopian and Italian governments and the European Investment Bank (EIB).
China National Water Resources and Hydropower Engineering Corporation is building the 300MW Tekeze dam in Tigray province, due on stream next September.
Five-year plan
The projects form part of the Universal Electricity Access Programme (UEAP), launched in 2005 with the aim of increasing access to power to 50% of the population by 2010 from 17% at the launch, by extending the grid to 6,000 rural towns and villages. So far, the access figure has reached 22%.
“Over the course of our second millennium, we have gone from being one of the most advanced nations on earth to one of the poorest,” Minister of State for Mines and Energy Sinknesh Ejigu told Spintelligent’s East African Power Industry Convention in Addis Ababa on 19 September.
Looking further ahead, the regional Nile Basin Initiative is funding pre-feasibility studies for the 2,000MW Mendaya and 1,400MW Border hydro projects in Ethiopia, as well as Dal 1 in Sudan.
Norway’s Norplan is carrying out studies for the 254MW Genale VI project, and is also involved in the 90MW Wabe-Shebele project, which is presently on hold because of tensions with Somalia.
About 90% of Ethiopia’s energy consumption is from biomass, and the smell of wood smoke hangs heavily at night even in the centre of Addis Ababa.
Minister Sinknesh said Ethiopia had more than 45,000MW of hydropower potential divided among 12 river basins. The country had plenty of experience in managing the social and environmental impact of dam projects, he added.
Asked about the likely impact on countries downstream along the Nile of Ethiopia’s hydro development plans, Michael Abebe, head of the dams and hydropower design department at the Ministry of Water Resources, said a steering committee on the use of Nile waters that brought together Ethiopia, Sudan and Egypt was operating well. He argued that controlling the flow of the Nile would stop flooding in Sudan and improve the water supply to Egypt.
T&D expansion
The UEAP also aims to expand the transmission and distribution network. France’s Areva carried out a power system rehabilitation programme starting in 2004 that included extensive substation work.
According to Ethiopian Electric Power Corporation (EEPCo) managing director Miheret Debebe, the existing system consists of a total 7,132km of transmission lines. This includes 2,194km of 230kV lines, 2,743km of 132kV lines, 1,537km of 66kV and 399km of 45kV, as well as 245.3km in the non-grid self-contained system.
A recent study commissioned by EEPCo showed that to cope with the development of the power system, it needed to install 500km of 66kV, 4,000km of 132kV, 4,500km of 230kV and 3,000km of 400kV lines by 2015.
Growth scenario
Miheret said EEPCo had 1.3m customers, of whom 40% lived in Addis; it is aiming to add an average of 350,000 new clients annually under the UEAP, and to electrify 1,700 towns this year.
Demand growth is forecast at an annual average 17% for this year, rising as high as 22% in some months, he said. Average annual growth in 2002-05 was 13%. This high level reflects a fast pace of gross domestic product growth at 10%/yr. If GDP growth remains at 7-10%, EEPCo expects electricity demand growth to average 17% over the next few years.
The World Bank has been an enthusiastic supporter of Ethiopia’s electricity sector, even though EEPCo has no immediate plans for the kind of restructuring undergone by other utilities in the region. The government is also confident of continued support for its power projects from the African Development Bank (AfDB) and EIB. And on 25 September, Ethiopia signed a $208m loan agreement with China to finance new power generation and to expand a cement factory.
Miheret gave a project financing breakdown of 36% multilateral donor financing, 17% local banks, 13% grant funding, 12% from EEPCo’s own resources, 11% supplier credit, 8% equity and 2% customer contribution
The planned new generation capacity is essentially hydro, and EEPCo puts the unit costs/kWh for its upcoming projects at between $0.0224 and $0.0514 cents/kWh, with an average well below $0.05/kWh. The customer tariff is $0.06/kWh.
A new domestic connection costs around $50, sometimes less, and EEPCo has a five-year credit scheme to ensure new connections are affordable.
Interconnection plans
Ethiopia’s ambitious development plans will also require development of interconnections with neighbouring states, to enable it to export some if its new capacity and play a role in the nascent Eastern African Power Pool (see Power, below).
The most advanced of the projects is the interconnection with Djibouti, for which contracts were signed in Addis Ababa in early September. PB Power has the project management and construction supervision contract, while India’s Kalpataru has the main contract, valued at $38m, for the construction of 282km of 230kV overhead line from Dire Dawa to Djibouti.
Siemens Italy has a contract for the $30m construction of a 230kV extension to the existing Dire Dawa substation, as well as a new 230/33kV substation in Adigala, while France’s ETDE, Bouygues Construction’s electrical contracting and maintenance subsidiary, has a $13m contract to electrify eight Ethiopian border towns.
The AfDB approved an initial loan of $56.1m for the project in 2004. However, the two countries are now seeking an additional $19.6m.
PB Power project manager Mike Allison said the two governments had given formal guarantees that they would ensure the outstanding amount was secured.
The interconnection will enable Ethiopia to export 120MW and generate $80m of revenues for EEPCo, according to the terms of a power purchase agreement signed by the two countries in 2006.
Miheret said talks were now under way on a submarine cable extension from Djibouti to link with the Yemeni grid.
Interconnections are also planned with Somalia, the autonomous Somaliland region and Kenya.
Ethiopia and Sudan are in negotiations on their interconnector – Miheret said they expected to sign an agreement this year. “The tender is floated, what remains is concluding the power purchase pricing issue,” he said.
The Ethiopia-Kenya link is at the feasibility study stage.
Miheret outlined ambitious plans for Ethiopia to link with both the Southern African Power Pool and, via North Africa, into Europe.
Miheret said Ethiopia was keen to explore public/private partnerships, as well as the potential for using Clean Development Mechanism credits.
Geothermal potential
There is also potential to develop geothermal generation, and the government is seeking to resolve problems at the Aluto-Langano pilot geothermal plant, as well as studying the development of the Tendako site.
“All these fast-track projects have the strong commitment of the government,” said Sinknesh. “We have a five-year programme to get out of poverty. We can’t get out of poverty without giving our people access to energy.”
| ETHIOPIA: Hydroelectric and other power infrastructure |
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