Ethiopia - Kenya Power Project Gets $348 million loan
Source: The Star (Kenya)
The African Development Bank has approved a $348 million (Sh29.5 billion) loan for part financing of a cross-border electricity infrastructure project between Kenya and Ethiopia. The Eastern Electricity Highway Project is intended to promote electricity trade between East African economies whose energy demand is expected to rise in less than a decade.
"With the approval of this project, we have solidified our position as the key strategic partner for East African countries in the power sector," said AfDB regional director for East Africa Gabriel Negatu in a statement. "Our involvement in the project has included a leading role in the preparation of the project and financing some of the feasibility studies required to appraise the project and make it bankable."
The $1.26 billion (Sh107.1 billion) cross-border power line will be co-financed by the two governments, World Bank, AfDB and the French Agency for Development. It will involve construction of a 1,068km high-voltage, direct current, 500kV transmission line between the two countries. Converter stations will be erected at Wolayta-Sodo (Ethiopia) and Suswa (Kenya), with a power transfer capacity of up to 2,000MW. It is scheduled for completion in 2017.
The integration of the power systems is hoped will create a "power pool" plugging into Ethiopia's massive hydropower resources, enabling Ethiopia to sell its surplus electricity to Kenya. The transmission line is intended to reduce energy costs and promote sustainable and renewable power generation.
"It has the potential to replace some fossil-fuelled thermal generation in the East African region," Negatu said. East Africa countries experience occasional power shortages and are usually forced to switch to expensive diesel-fuelled emergency generators for thermal power. This is despite the fact that the region is endowed with untapped natural resources such as geothermal, wind, solar and hydropower.
AfDB said the additional power once injected into the Kenyan grid will enable supply electricity to an additional 870,000 households by 2018, and a cumulative 1.4 million household by 2022. "Businesses and industries will also benefit, with around 3,100GWh of additional energy by 2018, increasing to around 5,100GWh by 2022."
AfDB approves $348 mln to fund Ethiopia-Kenya power line
The African Development Bank has approved a $348 million loan for Ethiopia and Kenya to finance a cross-border power line, the second phase of a $1.26 billion project to help improve power supply.
Ethiopia is poised to generate revenue exporting power from its hydropower resources to Kenya, which is facing constant power blackouts.
Kenya, east Africa's biggest economy, has been investing in its infrastructure, including expanding power supplies to meet growing demand amid robust economic activity.
The electricity will originate from a number of existing and future power plants in Ethiopia.
AfDB said Ethiopia would receive $232 million of the funding, while Kenya would take $116 million.
The World Bank approved the first phase of the funding in July, totalling $684 million
The project, a 1,068 km high-voltage transmission line, is co-funded by the World Bank, the French Development Agency and the Ethiopian and Kenyan governments.
IMF Urges Ethiopia to Slow Nile Dam Project to Protect Economy
By William Davison
Ethiopia should slow the construction of Africa’s largest hydropower plant to avoid the dam and other projects starving the rest of the economy of funds, the International Monetary Fund said.
The government began work on the Grand Ethiopian Renaissance Dam, situated on the Blue Nile River near the Sudanese border, in April last year. The 80 billion-birr ($4.5 billion) project that will generate 6,000 megawatts, partly for export to the region, is scheduled to be completed in 2018.
“I think there’s a need to rethink some of those projects a little bit to make sure that they don’t absorb all domestic financing just for that project,” IMF country representative Jan Mikkelsen told reporters yesterday. “If you suck in all domestic financing to just a few projects that money will be used for this and not for normal trade and normal business.”
Ethiopia Government Forms Company to Develop Oil, Gas Resources
Ethiopia announced plans to start a state-owned company that will develop oil and gas resources in a partnership with private companies. Bloomberg news first reported the announcement, citing Ethiopia's Mines Minister Sinknesh Ejigu. In a phone interview with Bloomberg news, Minister Sinknesh said the company will “bolster and enhance development”. In addition, Ethiopia will also set up a public enterprise that help to extract mineral resources including precious metals, tantalum and potash.
Ethiopia is looking to develop gas fields in the country’s eastern Somali region after cancelling its contract with PetroTrans, which it had expected to bring financing of as much as $5 billion. The company rejected the termination of its contract.
World Bank under fire over Ethiopian dam
The Gibe III dam in southern Ethiopia is a controversial project. Now the World Bank has come under fire over its plans to finance a power line from Ethiopia to Kenya which critics say could be fed by the dam.
Lake Turkana stretches from southern Ethiopia deep into northern Kenya. It is the largest lake in an arid region. But there are fears that time is running out for the biotope on which hundreds of thousands rely for their water needs. The threat comes from Gibe III, a hydroelectric dam project in southern Ethiopia. The plan is to dam the Omo River which flows into Lake Turkana, in order to provide electricity for more than 200 million people in five countries. The dam project, the highest in Africa, has already been delayed and is now scheduled to start operating in 2014.
High demand for water
Samuel Maina doubts whether there will be enough water in the dam by then. He is a communications advisor with the Kenyan organization "Friends of Lake Turkana" which since 2008 has been working to protect the lake. As a result of climate change, rainfall in the region has decreased, Maina says. And if the water remains in the dam, then the level of Lake Turkana could fall.