The Reporter (Addis Ababa)

17 May 2014

Ethiopia: Chinese Exim Bank to Finance Aysha Wind Power

- Three Chinese firms shortlisted for Geba hydro-power project - Over USD 32.7 mln secured from power export

The Ministry of Water, Energy and Irrigation (MoWEI) said Tuesday that it had received promising signals of getting a loan from the Export-Import (EXIM) Bank of China to finance the Aysha II wind energy project, which is located in the Somali Regional State.

The Minister, Alemayehu Tegenu, who was presenting the nine-month report to the House of Peoples' Representatives (HPR) said that negotiations with a Chinese company, Dongfang Electric Corporation (DEC), were conducted the previous year. Though the outcome of the negotiations had been presented for decision, it had taken a long time to secure finance for the project, he added.

But now the EXIM Bank of China had indicated that it would finance the Aysha II project and as a result the management team of EEPCo had already endorsed the contractual negotiations that were made with DEC so as to enable the signing of a contractual agreement.

The Aysha II project is part of the four wind-power generating projects which collectively produce 444 MW of power. These projects include Ashegoda, Adama 1, Adama 2, Aysha 1 and Aysha 2.

Like the Aysha project, one of the main projects that had been included for the budget year was a study to start the Asella wind energy project, Alemayehu told MPs.

According to the Minister, the office was able to carry out 60 percent of the plan. As a result, the technical evaluation of the consultant had been endorsed by the management with no objection. He added that the technical evaluation was sent to the African Development Bank (AfDB) and that its decision was being awaited.

However, the Minister did not explain how much money the loan is expected to be from AfDB as well as the details of the Asella wind farm.

Speaking on a similar project, the Minister indicated that the Geba Hydropower electric project had attracted more Chinese companies. Geba is a tributary of Baro River.

The Minister, who also recalled that the corporation had agreed with four Chinese companies earlier, said that their documents were being evaluated.

"Now two of them have formed a joint venture and asked to carry on with the project together. In general, three bid documents have been presented to the corporation, and their documents are being evaluated thoroughly by a team of experts," Alemayehu said.

Meanwhile, according to the Minister, the Chemoga Yeda hydroelectric power- generating project, located in the Gojjam area of the Amhara Regional State, had not yet been launched because the loan that was requested by Water Right consultants to the Chinese government had not been secured on schedule.

Alemayehu indicated that his office had put in place three power projects under hydroelectric power projects, including Tekeze, Fincha Amerti Neshe and Beles.

Though most parts of these projects were achieved successfully during the budget year, the Fincha Amerti Neshe project faces some challenges in resettlement issues because there are residents who live near the reservoir.

"The resettlement process of the farmers residing along the reservoir area remains halted since July 2013 because of the unwillingness of the farmers to move to other areas," Alemayehu told MPs, adding that efforts were under way to find a solution.

In the same report, the Minister indicated that the nation had amassed 32.7 million USD in the first nine months of the budget year from the exported energy to the Sudan and Djibouti. According to him, for the current year, 867.89 GWh of electric energy was planned to be sold to the two neighboring nations. However, only 52.3 percent of the target had been met.

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