Immediately after the launching ceremony held on Tuesday May 14 at the Hilton Hotel, the Ethiopia-Kenya Electric Highway Project
has attracted great interest among different international companies.
The project, launched by the two countries’ respective government bodies and their co-financiers, the World Bank (WB) and the African Development Bank (AfDB), aims to create revenue from the export of electric power for Ethiopia and access to affordable, clean and reliable electricity for Kenya. Furthermore, the project is due to contribute greatly in realizing regional integration in Eastern Africa.
“The Ethiopia-Kenya Electricity Highway Project is of strategic importance as it will form the backbone of the Eastern African Regional Transmission Network, as well as anchor the development of the Eastern Africa Power Pool,” Lamin G. Barrow, Country Resident Representative for AfDB, said. “Regional power trade supports economic integration of the region. This interconnection project will establish power trade between Ethiopia and Kenya, and the wider East Africa Power Pool countries.”
According to Guang Z. Chen, Country Director of the WB for Ethiopia, the project, which is due to benefit more than 212 million people in the east African region, will help the Ethiopian government to realize its vision to become the power hub of East Africa. “Exports of power to Kenya and other neighboring countries will earn Ethiopia important revenues, contributing to the government of Ethiopia’s financing of its ambitious energy strategy and consequently to economic growth and the improved well-being of its citizens,” he said. “The project will also help Ethiopia develop its vast hydropower potential, which is estimated at 45,000MW. “
The World Bank had become infamous in the country for not financing hydropower projects in Ethiopia for quite a long time. However, the Country Director hinted that the bank has started discussions to work with the government of Ethiopia on other hydropower projects, but firm commitments haven’t been made so far. “We are discussing projects like Alele Worabessa for example,” he said.
Alemayehu Tegenu, Minister of Water and Energy (MoWE), agreed that the Ethiopia-Kenya interconnector is an important move for the development of the Eastern Africa Power Pool. “The project is a form of renewable energy source and will also support East African countries in the provision of clean energy, which will allow them to benefit from carbon credit mechanism,” he said, in his opening remarks during the ceremony. He is hopeful that after completion, the project will contribute to the socio-economic development and regional integration, the promotion, strengthening and expansion of infrastructure development through regional cooperation in key productive sectors of the economies of the region. He said the project, which is one of the biggest transmission highways to be constructed in Africa and has a capacity to carry 2,000MW, supports reduced investment costs for Kenya and also offers Ethiopia the opportunity to earn foreign exchange revenue. Therefore, the power interconnection is a win-win solution for both countries.
The total cost of the project is USD 1.262 billion. The transmission line through Ethiopia will cost USD 500.4 million, while USD 762 million is required to build the transmission line through Kenya. The Ethiopian side of the project is co-financed by the World Bank, AfDB and the government – USD 236.4 million, USD 242.9 million and USD 21.1 million respectively, according to Fisseha Aberra, Director of the International Financial Institutions Cooperation Directorate, at MoFED.
Ethiopia is committed to sell 400MW of power for 30 years to Kenya, while the interconnector to be built can carry 2000-3000MW and will enable Ethiopia to export almost double the electric energy it utilizes currently. The country will earn an annual revenue of half a billion dollars after the completion of this project, in accordance with current electric power prices, Mihiret Debebe, CEO of the Ethiopian Electric Power Corporation (EEPCo), said.
This project will employ five contractors on the 1,200km transmission line so that it would be completed as per schedule. A consultant has already been selected, according to Mihiret. However, he refrained from stating the name of the company selected as it has yet to be approved. Guang Z. Chen, whose bank will provide USD 243 million towards the cost of the project in Ethiopia and USD 441 million towards the cost of the project in Kenya, also said good progress has been made in the procurement of key contracts, including a supervision engineer and the contractors for converter station and transmission line lots.
The project is drawing considerable interest from international companies like Asia Brown Boveri (ABB), a reputable Swedish company involved in the development of hydropower projects, especially on the development of interconnectors worldwide. “We have done a couple of projects in Africa since 1970, including upgrading,” said Olof Heyman, Senior Vice President for High Voltage Direct Current (HVDC) at ABB. He said the Ethiopia-Kenya Electric Highway Project is a huge one and only four or five worldwide are as big as or greater than this project.
Heyman, who believes that HVDC has lower losses and connects different nations, said that his company will face very tough competition from other companies worldwide. However, he is optimistic that his company will get the contract.