Nation’s Most Expensive Dam Undertaken by Sino-Ethiopia JV




A joint venture between two Chinese and one Ethiopian contractor are undertaking the construction of the twin Gebba Hydro electric power dams, with 9.3 billion Br in financing from China.

The dams will be built on the Gebba River in western Ethiopia across the Jimma and Ilu Aba Bora zones of the Oromia Regional State. It is a project for which the power utility had been looking for contractors and financing since October 2008.

When it sought for expressions of interest by the end of November that year, the specifications it gave for the dams were 214.4Mw for Geba 1, with a head of 480m, and 157Mw for Geba 2, with a head of 267m. The average annual generation of the two was given as 935GW-hours and 853GW-hours, respectively, with a 2006 cost estimate of 295 million dollars and 124 million dollars.

The idea was first incepted in 2005, when a feasibility study was conducted by two Norwegian consulting firms, Norplan Consulting Engineers & Planners and Nor Consult LLC, in association with two other local firms, Shebelle Consult Plc and the Water Works Design & Supervising Enterprise (WWDSE). But it was updated by Norplan in 2012.

Now, the Ethiopian Electric Power (EEP) expects 391MW from the hydro-electric complex of Geba 1 and 2, up from 371.5MW originally. The total cost has also gone up from 419 million dollars then to 583 million dollars, or 11.66 billion Br, 80pc of which is coming from for the EX-IM Bank of China in a preferential credit modality. The government covers the remaining 20pc.

Back in 2005, the African Development Bank (AfDB) had shown interest to finance part of the project. They sent a team for appraisal in 2009 to determine the feasibility of the project and its impact on the environment. At the time, it was believed that the bank could extend a loan of 100 million dollars, with the government and other financiers to cough up the balance, according to Lamin Barrow, the AfDB’s resident in Ethiopia who spoke to Fortune in 2011.

The twin dam project, now supported by Chinese financing, seeks completion in four and half years across two phases. Geba I will be a 46m high clay-core dam with an installed capacity of 226 MW, while Geba II will be a 70m high concrete faced rock filled dam with an installed capacity of 165 MW, with the total 391MW utilizing a head of 747m, according to Azeb Asnake, EEP’s CEO.

The two dams will be part of separate power plants that will be located close to each other and have their own underground waterways, powerhouses, switchyards and short transmission lines, she said.

The two Chinese companies making up part of the joint venture,  SINOHYDRO Corporation Limited and  Gezhouga Group Company Limited (CGGC), will undertake the design and construction of the dams and have shares of  40pc and 35pc, with the Ethiopian side, Sur Construction Plc, having the remaining 25pc. The deal between the three is such that SUR, depending on its performance, could increase its share to 40pc, according to Tadesse Yemane, the company’s general manger..

These three companies previously constructed the Tekeze Hydropower Project, which was finalised in 2012. CGGC also constructed the Fincha-Amerti Neshe hydropower project and is currently working on Genale Dawa III.

The project’s cost per megawatt makes it the most expensive ever at 29.7 million Br, taking the record from Tana-Beles, which was 15.4 million Br for a megawatt. It will cost twice as much as the Great Ethiopian Renaissance Dam (GERD), whose cost per megawatt is only 13.4 million Br.

The agreement was signed on Monday September 8, 2014, at the Sheraton Addis Hotel by EEP’s Chief Executive Officer, Azeb Asnake, and the representatives of the joint venture companies, in the presence of Alemayehu Tegenu, minister of Water, Irrigation & Energy, and Xie Xiaoyan, ambassador of China to Ethiopia and representative to the African Union (AU).

The GERD, planned to generate 6,000Mw, is now 40pc complete, with the remaining work expected to be finalised by the end of the current fiscal year. The Gilgel Gibe III, which has the capacity of producing 1870Mw, is 86.4pc complete, with its intended inauguration in 2013/14 delayed because of ‘final works’, according to EEP officials. It is expected to be completed this year.

When the Growth & Transformation Plan (GTP) was designed in 2009/10, the total electric power capacity of the country was 2000Mw. After four years, it reached 2,268Mw, less than half the government’s plan of 5054Mw by 2013/14.  The overall plan of the GTP, ending this fiscal year, is to attain a capacity of 10,000Mw.

The Ashegoda and Adama wind farms contribute 171Mw to the national grid system. Tana Beles contributes the highest amount of hydroelectric power with 460Mw, Gilgel Gibe II and Tekeze follow with 420Mw and 300Mw, respectively. Hydro-power sources contribute 87pc of the power that goes to the national grid. Wind has an eight percent share, the remaining comes from geothermal sources.



By FASIKA TADESSE
FORTUNE STAFF WIRTER

Published on September 14, 2014 [ Vol 15 ,No 750]


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