Ethiopia: Abiy Urges Local Investors to Develop Genale-Dawa Power Project

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Inaugurating the delayed Genale Dawa (GD-III) hydroelectric power project on Tuesday Prime Minister Abiy Ahmed (PhD) made an appeal to local investors to build the next phase of the hydroelectric project GD-6, in the same river basin that requires an estimated financial outlay of USD one billion.

According to the PM, the latest offer is issued for the first time to the private sector to get involved in the power production sector.

Expressing the government's desire of allowing the private sector in power generation, the PM said the government may consider offering the project to foreigners, if the local investors fail to take advantage.

The new hydropower project will help enhance the economic benefits of Genale and Dawa communities through expanding irrigation development, the Prime Minister said. He added that on top of providing electric power to the community, the project will boost irrigation developments in the area that will enable to sustain food security.

Abiy called upon Ethiopian investors to begin a new Genale Dawa-6 hydropower plant project to produce energy and expand irrigation, in a joint venture with the government of Ethiopia.

The Genale-Dawa III project, which was built on Dawa River in Southeast Ethiopia, has a total installed generating capacity of 254 MW.

Built by a Chinese firm - China Gezhouba Group - the power project has consumed a total investment outlay of USD 451 million, out of which about USD 67.8 million was covered by the Government of Ethiopia. The remaining was covered by a loan.

According to the official information disclosed by the government, the project was initially launched in 2010. The 110 meter high and 426 meter long dam has the capacity to hold 2.5 billion cubic meters of water. The project, however, was temporarily suspended for more than a year due to certain setbacks related to resettlement of residents living close to the dam.

The completion of the project is said to help increase the country's electric power generation capacity to 4654 MW from the existing 4,200 MW.

Envisioning for more power projects to meet the actual demands of the country, the PM noted that the nation still needs to invest more on local water resources, by encouraging local investors to involve in all identified projects including GD-6.

Over the past three years alone, some foreign companies from Western Countries and Chinese firms had submitted their project proposals to the Ethiopian Electric Power (EEP).

Among the foreign companies include: British energy firms, Chinese firms and Turkish construction companies.

The British-owned power and energy firm, Contingent Technology and Globeleq, has offered the Ethiopian government an investment finance amounting to USD 850 million to build a mega hydro-electric plant along the Genale Dawa River basin, and operate it as a portfolio of independent power plants for a maximum of 25 years.

Earlier in the week, the companies' representatives announced their readiness to build the first plant at the Genale Dawa River. The plant, with a production capacity of 250 MW, will cost USD 850 million. The companies' interest lays on specific projects in the vast catchment area of the Genale Dawa Basin, identified by the Ministry of Water, Irrigation and Electricity (MoWIE) as Genale Dawa VI or GD-6.

The Ministry also describes Genale GD-6 as one of the most attractive hydropower projects identified and studied at a pre-feasibility level in the ongoing Genale-Dawa River Basin Integrated Resources Development Master Plan Study Project.

Officials of the firm told The Reporter they had already mobilized their financial resources from the London-based shareholders (CDC Group plc. and Norfund) via the Cambridge Industries Company.

"We are the largest power producers in Africa for private generation; we want to replicate in Ethiopia, what we did in Kenya and Tanzania," Globeleq's East African head, Christian Wright, told The Reporter.

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