Gov’t slams private sector for failing to uphold pledge for GRD

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The Grand Renaissance Dam (GRD) National Public Mobilisation Council expects the active involvement of the private sector in finance mobilisation for bond purchases.

Two years ago, the government started the sale of bonds under the responsibility of the Development Bank of Ethiopia (DBE), one of the three state-owned banks, geared to support the GRD project.

The private sector, civil servants and the rest of the public have all made pledges to buy bonds worth 10.2 billion birr at the time when the GRD was launched. According to the performance report unveiled at the annual meeting held a week ago, bonds worth a total of 5.2 billion birr have so far been purchased.

At the meeting held at the Sheraton Addis, the Council said that pledges made by the private sector to purchase bonds worth huge amounts of money have not been kept let alone for them to go beyond it. According to the report, the private sector organised under different sectors had made pledges to buy bonds worth 2.8 billion birr, while the total amount that had been paid up until now is just 1.1 billion birr, or 40 percent of the total. At the event, the council officials stated that the private sector has to keep its promises as planned. “The private sector has to deliver on the pledges it made like other citizens who have successfully done so,” officials said.

According to the plan, about 23 percent of the funding for the construction of the GRD is expected from the public, the private sector and civil servants, which means that finance secured from bond sales will cover about a quarter of the total amount for the project expected to cost approximately70 billion birr. The amount from the sale of bonds to the Ethiopian Diaspora is also not as anticipated. Ethiopia issued the bond law in the late 1960s. However, it is only recently that the sale of bonds has been successfully applied in the country. The Ethiopian Electric Power Corporation’s bond sales to the Ethiopian Diaspora also did not meet the expected target. The rest of the financing for the GRD is expected to be covered by the Ethiopian government and is projected to be completed within seven years. The Italian construction firm Salini Costruttori SPA is undertaking the building of the GRD and is also carrying out the construction of the Gibe III dam. It has recently concluded the construction of the Gilgel Gibe II and Tana Beles hydro power plants that does have an installed capacity of generating 420 MW and 460 MW, respectively.

The new GRD was launched in the presence of the late Prime Minster Meles Zenawi and is located in the Benishangul Gumuz Regional state. It is the biggest ever hydropower project in the nation and is expected to generate 6,000 MW of electricity.