Feb 05, 2010
Ethiopia prepares case for megahydropower project fundingBack
Addis Ababa|Djibouti|Development Bank|Ethiopian Electric Power Corporation|Hydropower|Investment Bank|Mid Day International Consulting|Salini Costruttori SA|Africa|Djibouti|Ethiopia|Italy|Kenya|Sudan|USD|Bank|Electricity|Energy Crisis|Lake Turkana|Omo River|River Omo|Colin Bruce|Kenichi Ohashi|Obiageli Ezekwesili|Robert Zoellick|Samir Omar|Thierry Tanoh
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Should it go ahead, the project will be Ethiopia’s single largest investment, with a $1,7-billion price tag and capacity to generate 1 800 MW of electricity, some of which will be exported to countries like Kenya, Sudan and Djibouti.
Already Kenya is banking on the project to solve recurring energy crises and negotiations are ongoing for the importation of 500 MW.
During her visit to Kenya, in November last year, World Bank vice-president for Africa Obiageli Ezekwesili revealed the bank had raised concerns about the manner in which the Ethiopian government was managing the project.
In particular, the bank queried the environmental- and social-impact assessment (ESIA) on the grounds that it was not conclusive enough and also disputed the award of the contract to an Italian company without competitive bidding.
“Africa has the potential to be another pole of growth for the world economy,” said the bank.
]According to an official at Kenya’s Ministry of Energy, the Ethiopian government has prepared a strong case to convince the World Bank boss about the Gibe III project’s importance to the economies of Ethiopia and other countries in the region.
“The project is going to affect more that 500 000 people living downstream, and we feel it should be abandoned,” says Samir Omar, of Friends of Lake Turkana, from which the Omo river drains.
Various reports show the World Bank, and the EIB, are consider- ing withholding funding for the project because the ESIA prepared by CESI & Mid Day International Consulting was not conclusive and failed to deal with the effects on downstream communities.
The financers are also querying the manner in which the Ethiopian government awarded the construction contract to Salini Costruttori, of Italy.
The report states the company was awarded a no-bid engineering, procurement and construction contract largely owing to its past engagement with the Ethiopian government.
“The contract, worth $1,7-billion, violates Ethiopia’s federal public procurement directives,” it states.
The possibilities of financers withholding funding has resulted in unprecedented concern in Ethiopia, considering 35% of the work has been done.
This includes diverting the water in order to build what is billed to be the tallest dam in Africa, at 787 ft. The dam will have a storage capacity of 11,75-billion cubic metres.
Power exports from the planned project could rake in $407-million annually, much more than what Ethiopia earns from exports of coffe, the country’s major foreign currency earner.
Edited by: Martin Zhuwakinyu© Reuse this Comment Guidelines
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