Business Daily (Nairobi)

3 July 2009

Ethiopia: AfDB Set to Start Funding Country's Gibe Dam

The African Development Bank (AfDB) is making preparations to start funding the Gibe III dam, a mega project on River Omo whose completion is expected to alleviate Kenya's perennial electricity crisis.

AfDB's director in charge of infrastructure, Mr Gilbert Mbesherubusa, says the bank is conducting technical, economic and financial assessments of the project to start the works by end of year.

"The project will bring electrical energy to Ethiopia, Kenya and neighbouring countries, thus contributing to regional economic development and poverty alleviation," he said.

However, activist groups around Lake Turkana have been mounting campaigns against the project, saying it will affect the ecosystem.

Apart from AfDB, the World Bank and European Investment Bank are some of the financiers that the lobby -- Friends of Lake Turkana -- has been targeting.

The same group of financiers is also expected to support the construction of power transmission lines between the two countries to facilitate electricity importation.

AfDB says it accepted to fund the project after a full scale environment and social impact assessment cleared it.

"And in line with our policy of financing only the socially acceptable projects, we have an ongoing dialogue with local communities to be affected by the project," said Mr Mbesherubusa.

The construction of the whole project is expected to cost €1.55 billion is already 32 per cent complete.

It was not immediately clear which proportion of the remaining phase of the project will be funded by AfDB.

The hydro-plant is designed to generate 1,870 megawatts of electricity once completed and commissioned in 2013, making it the largest dam in Ethiopia.

This could relieve Kenya's investors who have had to bear the brunt of climate change which has drastically reduced the country's hydro electric power generation potential.

The country projects her electricity demand to rise to 2000 megawatts in the next five years, almost double the present installed capacity.

This not only calls for diversification into wind, solar and other forms of renewable energy but also makes Ethiopia's hydro projects a more attractive option to power economic growth.

Even without the Gibe III hydro plant, Ethiopia's national grid currently boasts a surplus of 400 megawatts.

AfDB's financing assurance comes barely two weeks after a team of Kenya government officials who had travelled to Ethiopia to investigate claims that the project poses a danger to the future of Lake Turkana also gave it a clean bill of health.

Mr John Nyaoro, the water ministry's director in charge of water services who led the Kenya's fact finding team to Ethiopia, said the receding Lake Turkana waters was due to unrelated upstream development.

"This dam does not consume water. The river's water passing through it will merely be used for the purpose of turning the turbines after which it will be released downstream," he told a press briefing when he returned from Ethiopia last month.

River Omo contributes 20 billion cubic metres of water to Lake Turkana every year.

Mr Nyaoro's team found that lake's is only threatened by the cyclic climate change, rain failure and continued degradation of catchment rivers like Turkwel and Kerio.

To gain more say in the management of River Omo, Kenya has been pushing for a Co-operative Framework Agreement with Ethiopia, which is supposed to provide the legal framework for the establishment of a Basin Commission that will act as a clearing house for any developments in Lake Turkana basin.

Environmental assessmentThe CFA is also expected to compel Ethiopia to consult Kenya incase of any future change in water use of Gibe III dam, a request that it says should only be granted after a environmental assessment.

But the Ethiopian side has remained adamant, saying their own monitoring system is sound and that a cooperative mechanism, if needed, can be achieved through an inter- ministerial conference.

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