Finalizing GERD & attracting power investment

Finalizing GERD & attracting power investment (Fekadu W.)

On March 08, 2017 COMESA reported that, Genale Dawa III Dam is near to completion which will enhance Ethiopia’s energy capacity. It said the Dam is targeting to generate more than 250MW. The project, built on the Genale Dawa River at a cost of USD 451mn, will raise the country’s electricity installed generating capacity to 4, 541MW.

Dr. Sileshi Bekele, Minister of Water, Irrigation and Electricity Ministry said, 91 per cent of the project has been completed. According to him, the construction of spillway, power house, and 12.4 km tunnel are among the works that have been finalized. Launched six years ago, the 110 m high and 426 m long Dam has the capacity to hold 2.57 BL sum of water and generate 254MW.

Similarly, Grand Ethiopian Renaissance Dam (GERD) Coordination Office on March 7, 2017, stated that, the GERD trophy being circulated in Southern Nations, Nationalities and Peoples State has managed to mobilize over 300 million Birr. The trophy has been circulating for the purpose of rallying the support of people for the good cause of finalizing the Project.

So far, the trophy has rotated in three zones and one special woreda of the region. It has been targeted to drive the trophy to other zones and three special woredas of the region. The office has planned to generate 500 million Birr through the GERD trophy and rallying people for the same reason.

It has been said that, people will continue their assistance of the GERD till the end. And it has been witnessed during trophy circulation time that, the cooperation of people can work miracle to alleviate poverty and strengthen development endeavor.

It has been six years now, since the construction of (GERD) was launched. But until now, Ethiopians are contributing in kind and buying the Renaissance bond (the security bond the government floated to the public aiming to raise finance for the construction of the project). GERD is estimated to cost the country 80 billion Birr (more than four billion dollars).

Ethiopian Electric Power (EEP) Board chairman, Dr. DebreTsyion GebreMichael said construction of GERD has been evidencing vigorous participation of citizens both at home and in the Diaspora. The Project employs workers coming from all regions of the country. The Project has also taken deliberate steps towards balancing representation of the labor force. Until now, close to 60 percent of the Project has been complete and it has not encountered serious obstacles.

He said GERD is a national project and it has united Ethiopians from its inception. It has been witnessed that the Project has transcended the border of politics, even during challenging times. The construction of the Project has gathered unreserved momentum as a result of intensified support of people and their commitment until the end; GERD has the backing of the greater public both morally and financially.

GERD has defied challenging political pressure of foreign governments and NGOs that had actively campaigned against it. Even though they succeeded in curtailing foreign financing for the project, the problem was alleviated by the cooperation of people and the government. The Nation has been decidedly working to overcome foreign pressure and protect the GERD from any difficulty through the contribution of people.

Worth reckoning, it was able to upgrade the installed capacity of the Dam from 5200 MW to 6000MW within a year. Currently, electricity generation capacity of the GERD has been upgraded to 6,450 MW; some design improvement and boosting the capacity of generators has enabled to improve the existing GERD capacity by 1150 MW equivalent to the combined generation capacity of Tekeze, Beles and Gibe II (although it might not be significant, there are still rooms for improvement). 

The original plan of the GERD was to start generating power on a limited basis before the end of the term of the first Growth and Transformation Plan (GTP I), but that did not happen due to the fact that the nation spent the first year of the project on issues relating to contract and design. It was during this timeframe that it was able to improve the installed capacity of the Project.

Specifically, the number of turbines has been increased from 15 to 16; and this entails some changes to the design of the Dam. One extra turbine means widening the dam and that requires digging some 400 meters into the side of a mountain. So, nation had postponed its plan to start limited power generation by the end of GTP- I due to adjustments that should be made on the design and facilitation of the actual construction work to accommodate extra turbine. In addition, the improvement in generating capacity comes from the work of boosting the capacity of generators.

This improvement meant increasing the generating capacity of all but two of turbines to generate 400 MW each, while the two turbines will continue with the capacity of 375 MW.  However, actual power generation would require the Dam to hold the desired volume of water which should be done in collaboration with the downstream riparian countries as per agreements.

Nation has agreed to hold discussion with other riparian countries when the need arises. So, the length of time through which the GERD should hold water is something that nation is discussing with downstream countries. Although Ethiopia has not reached at a final agreement, it has continued discussion to help decide up on the time span to fill the Dam. As far as construction of the GERD is concerned, it has reached at a critical level to hold water.

In addition, nation is busily undertaking some activities needed to start the first phase power generation. GERD needs only limited amount of water to rotate two turbines. This preliminary activity does not need the consultation of countries as the volume of water assumed to start preliminary power generation will not result in any significant impact on any of the downstream countries. But, what is more challenging and disputable is arriving at comprehensive agreement on reasonable timeframe to fill the whole Dam.

There should be an agreed timeframe to fill the whole Dam (possibly supported by recommendation of professionals of the two selected consulting firms, which are expected to resume their work soon). The water volume required to activate all 16 turbines is quite significant and it is equivalent to two sizable lakes. Full water storage capacity of the GERD is bigger than Aswan dam. Hence, it needs the agreement of the three countries to decide upon rationalized timeframe.

Ethiopia has planned to expand its overall power-generating capacity to 17,000 MW by the end of GTP II(even though some say this is quite ambitious). The demand for power has been growing consistently in Ethiopia over the years. And meeting this demand is quite significant to sustain the current double-digit growth of the country and alleviate poverty in a meaningful manner. Hence, nation has decided to provide lasting solution by developing numerous power projects as possible before the demand catches up and hinders smooth flow of development activities.

This target is meticulously set with due consideration of the power requirement of a middle-income country. In spite of the per capita numbers, Ethiopia still has a long way to go to ensure universal access to electricity. So, although it has another ten years before reaching middle-income country status, it needs to make power available before reaching that level and  it decided to expand its capacity to 17GW by the next five years.

In terms of financing, to satisfy the growing demand, the nation needs to expend one trillion Birr. Seeing the insatiable need created by speeding development, one trillion Birr investment may not be easily attainable for the government, which needs to earmark millions of dollars to various development projects. Hence, the national plan is to gradually reduce the government’s share to around 20 percent of the overall power generation investment in Ethiopia. Overall, heavy financial burden on the government will be alleviated by the private sector, enabling the former to allocate money where it is needed most.

The expansion of the electric power supply is anticipated to have paramount contribution to the development of industrial sector. To this effect, the strategy which is at the pipeline to build additional hydro power plants has to be continued in consolidated manner. To this end, the government is highly encouraging both domestic and foreign private investors to invest in power generation area.

The current national energy policy allows investors to participate in the power-generation sector. So, it has decided to follow an independent power production (IPP) approach. It is a system where private investors would come with their own financial resources and develop power plants and sell the power to the national grid.

Ethiopia is interested to attract investors from different countries and it is one of the strategies devised by nation to generate power and feed the national grid. To this effect, the nation has started to float open bid to recruit capable companies (earlier, the nation was fully dependent on government-driven investment to generate power). The new approach is expected to realize the construction of as many power plants as possible and cope with an ever growing demand of power.

 

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