Five East African countries are expected to become beneficiaries of the Eastern Electricity Highway project which is expected to see these countries using Ethiopia’s surplus electric power for their domestic uses. The five countries expected to be connected in this power pool are the east African economic powerhouse Kenya, Burundi, Tanzania, Uganda and Rwanda.
This was revealed at the occasion of the USD 243 million loan agreement signed on December 14 between the Ethiopian government and the World Bank for the financing of a section of Eastern Electricity Highway project connecting Ethiopia’s electrical grid with Kenya.
The project is also expected to enable electric power sharing between the two countries so as to reduce energy costs, promote sustainable and renewable power generation as well as paving the way for more dynamic regional cooperation between the countries of Eastern Africa.
The WB said the new project marks the first phase of a regional east Africa power integration program which is likely to cost USD 1.3 billion when completed, eventually paving the way to benefit 212 million people living in five countries with a combined Gross Domestic Product of USD 107 billion.
Guang Zhe Chen, World Bank country director for Ethiopia disclosed that the bank and the Ethiopian government have reaffirmed the focus on the partnership as the major pillar for financing during the 2013-2016 period, which this project is part of.
This particular project has two components, the construction of a high voltage direct current transmission line between Ethiopia and Kenya and project management and capacity.
This project is also expected to connect the East African electrical grid, with the Southern Africa electrical grid, as well as the northern Africa electric grid.
The bank previously gave Kenya USD 441 million.
The 500 Kilo volt Ethio-Kenya transmission line is expected to be about 1200 kms long and cost an extra USD 200 million to reach USD 1.5 billion when the cost for Kenyans to upgrade their power infrastructure to take in this new electrical power and be more efficient is included.
Mihret Debebe CEO of Ethiopian Electric Power Corporation (EEPCo) said the Ethio-Kenya electric transmission line project’s economic viability study has already been finished, as well as its technical and financial study.
He said the process of hiring a consultancy firm is being finalized and the construction tender is expected to come out probably in the coming May or June with the first phase expected to accommodate 400 MW, and the second phase incorporating other regional countries, set to see Ethiopia’s power supply reach at least 2000 MW.
“We expect power export to be a source of a substantial foreign exchange earner, with competitive power export prices,” said Mihret, adding that the construction period is slated to be 36 months.
The second phase of power purchase agreement with other regional countries is expected to be done in the future with Tanzania reportedly having already requested power.
EEPCO said Kenya will be paid transmission charge or what is commonly known as willing charge agreement; meaning Ethiopia is going to have an independent power export negotiation with third countries.
All the electric power projects which are connected to the national grid including the 1870 MW Gibe III hydro electric power project depending on the electric network situation are expected to contribute to the Ethio-Kenya transmission line project.
“This particular project could rake in revenues more than our coffee export and as such could be comparable to selling petroleum to neighbouring countries” Mihret told Capital.
Mihret further said the Ethio-Sudan transmission line project has entered its fifth week of power testing of 100 MW, with inauguration scheduled in early 2013, and its power export is expected to reach up to 200MW in the future.
Ethiopia’s biggest hydro electric power project the 6000 MW Grand Renaissance Dam (GRD), when finished according to EEPCO, is going to have an electrical transmission line stretching to Khartoum and eventually reaching the Egyptian capital Cairo, with its study and design already being finished.
“These electric transmission line projects are also a way to create economic leverage, such as with Djibouti which we use for port services and from Sudan which provides petroleum products to us,” said Mihret .