The Millennium Hydroelectric Power Project has officially started construction. Prime Minister Meles Zenawi vowed for all Ethiopians to be involved in what he calls “Ethiopia’s contribution to the region”: a 3.3 billion euro dam, fully financed by Ethiopia. Both positively and negatively, the launching of what is to be the largest dam on the African continent has moved Ethiopians all over the country.
The central bank of Ethiopia issued bonds in order to raise funds for the construction of the Great Millennium Dam. The Labor Union of Sheraton Addis Hotel, one of the luxury facilities in the hospitality business of Ethiopia, announced that its members will buy bonds valued over 800,000 birr. The union has over eight hundred members.
Abreham Hagos, Head of Finance at the labor union told Capital that the members of the union will buy at least two bonds per head valued at five hundred birr each. “This project is one of the most valued milestones in the 21st century Ethiopia, it is a national call, and it needs national response” he said.
In a related development, the workers of Adika Tour and Travel Plc have come to terms with the management of the company to withdraw some portion of their provident fund to buy a bond. The company has 91 staff members.
Ashenafi Zeleke, General Manager at Adika Communications and Events, a sister company of Adika Tour and Travel, told Capital that workers at their companies will buy bonds worth 500,000 birr. “Our company is engaged in the hospitality business which is all about building the image of the nation. Projects such as the one we are engaging with at present will play its part in the effort to change an image. That is why we are part of this endeavor” he said.
There are also reports that many Ethiopians both locally and abroad are buying bonds, and even making commitments in the form of salary cuts and personal donations.
However some see the launching of the dam as a diversion from political turmoil that is raging the Arab world. A mechanical engineer, who wished to remain anonymous, thinks that the introduction of the Millennium Dam at this particular time is a deliberate attempt by officials to divert public attention from politics.
“It is not an attempt to engage the public in an economic endeavor but an action to divert the public mind from what is going on in North Africa and the Middle East to create a safe haven for officials who are fearful about the spill-over effects of the Arab unrest,” the person said. “We should make use of what is currently at hand in an efficient and effective manner before we go on to the development of the new one,” the engineer added.
Despite these reactions major opposition party leaders endorsed the project and vowed to support the project.
During the launching ceremony of the dam, Prime Minister Meles Zenawi pledged to develop a culture of saving so every citizen will be in a position to buy a bond that will consume a staggering 80 billion birr investment.
The premier said, “If we distribute the cost of the project based on the merit received, Sudan would cover 30 percent of the total cost and Egypt 20 percent. Given the uncooperative stance in the region, Ethiopia is forced to shoulder the burden on its own.” He added saying “we Ethiopians want to let others know that this is Ethiopia’s contribution to the region’s development from its limited resources at hand.”
The project is being constructed on the lower basin of Abay River in the Benishangul-Gumuz Regional State and is planned to be completed by 2017 with a generating capacity of 5,250 MW, more than three times of the current actual power generating capacity.
Salini Costruttori an Italian construction company is being awarded the civil work of the dam without any tender as happened in the last three big dam projects. Salini completed the construction of Gilgel Gibe I and Tana Beles HPP’s, while Gilgel Gibe II is under reconstruction after the tunnel collapsed within days of its official inauguration. Salini is now also constructing the Gibe III HPP with a generating capacity of 1870 MW. Salini clinched all the projects with a negotiation after it facilitated financial backups. In the past five years Salini has managed to increase its revenue to 1,156 million euro in 2009 from 297 million euro in 2005 worldwide.
For the first time an Ethiopian company, Ethiopian Metal and Engineering Corporation, will participate in hydro-mechanical and electro-mechanical works of the dam.
Meles while presenting the eight month performance of the country to the House of People’s Representatives on Tuesday April 5 said that Egypt used three different tactics to deter Ethiopia from any development agenda over the Blue Nile. He said they wanted to block any loan or grant to Ethiopia through their better geo-political location. He also accused Egypt of destabilizing Ethiopia through internal conflicts. He also pointed to Egypt’s huge army, designed to frighten countries of the Basin. The solution is simple he said. It is financing for the first technique, paying due attention for the second, and to be fearless for the third one. He added “the threat posed by Egypt is minimal. That by itself needs its own scientific analysis and preparedness.”
Officials of the Ethiopian Electric Power Corporation (EEPCo) say the dam will lessen evaporation in downstream areas and save close to eight billion cubic meters of water in and with only a slight reduction in the Aswan Dam in Egypt. This in effect, officials argue, will benefit not only Ethiopia but also other riparian countries in the basin through efficient use and a reduced risk of flooding and siltation. This will be further augmented by the result of environmental protection in Ethiopia and the water management scheme the country will follow for the dam, according to the officials.
Industry observers argue that it is only lack of cooperation, not a resource shortage that disturbs the water usage in the Nile Basin.
The Nile Basin Initiative was formed by all the riparian countries to come up with an equitable water sharing mechanism. It asks countries to consider their comparative advantage (for instance Ethiopia has a comparative advantage in hydropower development while Sudan has irrigation due to their respective geographical land mass setting) whenever they think of the water usage in the basin.
According to studies, Ethiopia has the potential to produce more than 45,000 megawatts of electricity from hydro power. This would place Ethiopia second in Africa, next to Democratic Republic of Congo with a potential of well over 100,000MW in potential. Ethiopia also has the capacity to produce more than 5,000 megawatts of electricity from geothermal energy while it can produce more than 10,000 megawatts from wind and solar energy.
The new project, located some 900 kilometers northwest of Addis Ababa and forty to twenty kilometers from the Sudanese border is expected to be completed in 2017. According to EEPCo, the completion of the civil work is scheduled to take place in January 2017 while the commissioning of all the fifteen generating units will be completed by June 2017. The first two units of the project are, however, scheduled to start generating electricity by September 2014.
It will take three to five years to fill the dam to its full capacity. The average river discharge at the dam site is 1,547 meter cube per second according to information obtained from EEPCo.
The project is considered inexpensive in terms of cost per unit of mega watt hours it generates.
The Governor of the National Bank of Ethiopia, Tekleweld Atnafu, announced last week, that his office has floated a bond through public financial institutions in order to raise funds for the project.
His office even ordered that private commercial banks buy a bond, about 27 percent of their loan disbursement after the announcement to end the lending cap imposed on commercial banks for about two years last Monday, April 01, 2011. According to industry observers, this is one of the many mechanisms by which the government intends to carry out the mega and ambitious plan envisaged in the Growth and Transformation Plan, the governing economic plan of the country for five years.
The most surprising fact about this grand undertaking is the participation of the present 77 years old lead engineer of Salini, Pitra Angel, the then young surveyor who identified the site as potential area for hydropower development half a century ago, exactly when Salini entered the construction market of Ethiopia, under the direct command of the then King of Ethiopia, Emperor Haile Silassie I.
Though the project was made public on March 30, 2011, it has been in progress since September 2010.
An air strip has been constructed providing access to light air craft and assuring fast and regular connection with Addis Ababa. A crushing plant is operational at the site while a batching plant is being installed.
The undertaking will create 12,000 job opportunities at peak of production.
EEPCo is the sole utility provider throughout the nation with its present generating capacity of not more than 1,300MW. This is planned to be increased to 10,000MW at the end of 2017. Only 41 percent of the total population has access to electricity. EEPCo intends to increase the current access to 75 percent in the next five years.
Africa constitutes 14 percent of the world population while it was able to produce only three percent of world’s electricity according to Abdoulie Janneh, United Nation Under-Secretary General and Executive Secretary of Economic Commission for Africa during his speech delivered at the International Hydropower Conference in Addis Ababa. He added that from a business viewpoint, power shortage and regular interruptions to services cost African firms about five percent of their sales while the economic costs of power outage in this continent estimated to reach one to two percent of gross domestic product.
Video: Ethiopians from all walk of life showing support for the Grand Abay Dam Project.