Ethiopian Review

At a critical time when the whole country is under stress due to the power shedding scheme, and when all major manufacturing firms are disconnected from the national power grid, the Ethiopian Electric Power Corporation (EEPCo) announced yesterday that 98 percent of the 420 MW Gilgel Gibe II hydroelectric power project has been completed.

The Gibe II project was expected to be operational in 2008, but the project was delayed for more than a year owing to problems related to natural causes which affected the construction of the tunnel and delayed the operation of earthmoving equipment. Except for the remaining mechanical and cleaning works, the plant is expected to join the national power grid within two months.

Gibe II is a continuation of the Gilgel Gibe I project, which involved the building of a conventional dam with a 917 million cu.m lake and that is capable of generating 184 MW of electric power. The Gibe II project is expected to increase the generating capacity of the country by 30 to 40 percent.

The new power plant, which was built under the Gibe II project, does not need a dam to be constructed. Instead, it will use the water discharged by the Gilgel Gibe I plant, channeled through a 26-km tunnel under Fofa Mountain to Omo River Valley where it will harness a 500-meter drop to generate 420 MW.

The total cost of the Gibe II hydropower plant is 373 million euros, of which 220 million euros was allocated by the Italian government while the European Investment Bank extended a loan of 50 million euros. The remaining 103 million euros was covered by the Ethiopian government.

Currently, the total installed capacity of the national grid from hydropower, diesel and geothermal is only 814 MW. Figures show that the national electric power demand gap is an alarming 120 MW, while the annual power demand growth is going up by 16 percent.

On November 17, 2004, the governments of Ethiopia and Italy signed a new cooperation agreement which included the extension of 220 million euros in the form of a soft loan that was made available for energy sector expansion, and specifically to finance the Gibe II project. This particular loan of 220 million euros was the biggest development fund released for a single project in the history of the Italian cooperation.

In addition, a grant component of 505,000 euros has been approved by the Italian Development Cooperation to assist EEPCo in project monitoring activities of Gibe II.

The project construction site was launched by Ethiopian government officials and representatives from the Italian Development Cooperation on March 19, 2005. The main contractor for the construction of the power plant is the Italian company Salini.

The project was assisted by professionals gathered from 30 countries in different fields, while more than 2,100 Ethiopians also participated in the construction, ancillary works, project consultancies and management and high voltage electric line connection to the national grid.

The project is located in south-western Ethiopia, about 250 km south west of Addis Ababa.

Currently, the government is undertaking the construction of four major hydropower projects: Tekeze (300 MW), Tana Beles (460 MW), Finchaa Amerti Neshi (100 MW) and Gilgel Gibe III (1870 MW).

The African Development Bank was holding talks with the Ethiopian government officials to finance the controversial Gilgel Gibe III hydropower project. Both sides have been discussing the modalities of financing the big project. Though the talks have yet to be finalized, the bank has shown keen interest to finance the project.

The project, which was launched some three years ago, is expected to cost the country more than 18 billion birr. One-third of the construction work of the hydropower plant has already been completed.

During the Ethio-Kenya joint consultative meeting here this week, the Kenyan director of Water Resources said that the Kenyan government was committed to providing unwavering support for the sustainability and feasibility of the project. He said that the project will be environment-friendly and Kenya welcomed Ethiopia’s multi-billion dollar hydroelectric project.

The Gibe III hydroelectric power project commenced in July 2006 following a contract agreement signed between EEPCo and Salini Construction.

- By Melaku Demissie and Firew Abebe | EthiopianReporter