Addis Ababa — The Ethiopian government and an Italian company signed on Wednesday evening a $ 2 billion hydroelectric power project (Gibe111 Hydro Electric Power Project), which said to be the biggest in Africa.
The hydropower deal was signed between the Electric and Power Corporation (EEPCO) and SALINI Construction, an Italian construction company currently undertaking various construction works in Africa.
The agreement was signed between Meheret Debebe, General Manager of EEPCO and Engineer Claudio Lautixi, General Manager International Division of Salini Constrottori in the presence of high-ranking government officials, including Foreign Minister Seyoum Mesfin.
The hydropower project will be constructed in the Northern West of Ethiopia where there are ample water resources in the area, including the Nile River.
It was reported during the deal that the installed power will be 1,870 MW with an annul production of 6,400 Gigawatt/hour, about 10 times the power of Gilgel Gibe phase, presently the biggest plant operation in Ethiopia.
"The project costs about 15 billion Eth.Birr.In addition to costs of engineering, administration, environmental and social impacts as well as transmission line (Gibe111 wolaita, Wolaita Kaliti, Wolaita Mega 550 KM, 400 KV), it goes up to 17 billion birr-equivalent to two billion USD,"Meheret Debebe of EEPCO said.
This power plant will be the third cascade on the Omo-Gibe river basin to the already operational 184 MW Gilgel, Gibe1 plant and the 420 MW Gilgel gibe 11 plant which is currently under construction.
"As an investment, this major project will repay itself in only five years of operation. The hydroelectric plant generates electricity with the water freely given by the Omo River, and after the investment is repaid, the plant will give some 300 million Euro per year of revenues, at almost no cost. And the hydropower plant is long last,"Debebe added.
The hydropower plant project is expected to be operational by 2011 within a five years period and is expected to create job opportunity for 5,000 Ethiopian.
"In the global picture where oil is getting scarce and ever more expensive, hydropower is the white oil of Ethiopia, clean and renewable," Claudio Lautixi of Salini construction said.
Up on the completion the project will augment the current 17 % access coverage to 50 %.
It will also help Ethiopia for energy export to neighboring countries like Sudan Djibouti and Kenya.
Interconnection of Ethiopia -Sudan and Ethiopia-Djibouti are already finalized.
"By next year similar studies will be completed with Kenya, which will enable Ethiopia to export energy to meet the Kenyan demand and also far to countries in the Southern power pool, while our country will earn a foreign currency," Debebe added.
The country is largely believed to be endowed with a hydro potential reaching up to 45,000MW.