Two Chinese, one local contractor win bid for Geba Hydro

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The Geba hydro electric power project which is the last of such endeavors in the Growth and Transformation Plan (GTP) has been officially awarded to two Chinese companies and one local contractor. The electric project that will commence under the five year GTP will be built at a cost of USD 583 million with 80 percent of the money coming from the Chinese EXIM (Export Import) Bank and the rest from the government’s treasury. It will generate 391 MW of electric power.
Sinohydro Corporation Limited and China Gezhouba Group Company (CGGC), which are both large construction companies, and the Ethiopian Sur Construction Plc agreed to terms with Ethiopian Electric Power (EEP), the newly established state firm formed when Ethiopian Electric Power Corporation (EEPCo) split into two.
The project will be constructed on Geba River, a tributary of Baro River, which also contributes water to the White Nile.
During the signing ceremony held on Monday September 8, at Sheraton Addis, Azeb Asnake (Eng), CEO of EEP, said that the master plan study covering the development of Ethiopia’s generation and transmission systems over a 25 year period from (2012-2037), ranks the Geba hydropower project as being the most important development project among those that have already had feasibility studies conducted.
The project area is located about 540km southwest of Addis Ababa in Illuababora and Jima Zones, in Oromia Regional State.
Norplan and Norconsult, the Norwegian consulting firms, undertook the feasibility study in 2005 in collaboration with Shebel Consult and Water Works Design and Supervision Enterprise, a local consultancy company.
The study was further updated in 2012 by Norplan, which has also undertaken several feasibility and pre feasibility studies of potential hydro power sites like Karadobi, Mandaya and Baro with the financial support of the Norwegian Agency for Development Cooperation through the “Clean Energy for Development” program.
Geba hydropower project is envisaged to be developed in stages and constitutes Geba I, which has a 46 meter clay core dam, with an installed capacity of 226 mw and Geba II, which has a 70 meter high concrete faced rock fill dam, with an installed capacity of 165 mw.
When everything is finished it will be able to generate 391 mw.
The two power plants (Geba I and II) are near each other and will be implemented simultaneously. According to Azeb both plants will have separate dams, underground waterways, powerhouses, underground tailraces, switchyards and short transmission lines.
Azeb, who also manages the Gibe III hydro electric project, mentioned that all three companies had submitted an offer to build the hydro electric facility but only the joint venture between the Chinese firms was accepted. The CEO told Capital that the companies will commence their work using their own capital, meanwhile the loan processes is underway.
“We are in the process of assigning a consultancy firm for the project,” she added.
The two companies are not new to working in the nation’s energy sector. CGGC and Sinohydro have undertaken the Tekeze Hydropower project which was commissioned in 2010. The 20 year old local construction company, Sur, has also participated in the construction process of the Tekeze project, which has a generating capacity of 300mw.
In addition to Tekeze Sur also worked on Tis Abay II, another hydro power project about 15 years ago, which generates 73 mw, with the former Yugoslavian company, called Energoprjekt Holding that is now based in Serbia.
CGGC has also accomplished the Fincha-Amerti-Neshe (FAN) multipurpose hydropower project that has 97 mw power generation capacity, in December 2011.
The company is also undertaking the construction of Genale Dawa III (GD III) hydro electric power project at a cost of USD 400 million which has been secured from the Chinese EXIM Bank.
GD III will have a production capacity of 254 mw. Construction is currently being undertaken at the project site, in the southern part of the country at Genale Dawa Basin, the third largest river basin in Ethiopia.
The project includes another hydro power project, Genale Dawa IV, which will also provide an irrigation scheme to the lower Genale basin.
The Genale Dawa River Basin Integrated Resources Development master plan study, financed by AfDB, indicated that the total capital investment required for the 20-30 year planning period is about USD 3.8 billion. The study which was completed two years ago indicated that the major share of this investment is water resource development.
The Ethiopian Sur Construction, who will also part of the project for Geba, will take 25 percent of the project. Tadesse Yemane, general manager of Sur, told Capital that his company will be engaged in the civil work of the project.
He said that his company plans to engage in similar projects in the country.
“We will be part of some other mega projects that currently are dominated by international giants,” he added.
“The previous and the current projects will show our capacity to international partners. They will demonstrate how a local company can contribute to big projects. These endeavors also are a good opportunity for us to expand our skills and capacity to handle major developments,” Tadesse explained.
EEP has plans to include local companies on this specific project.
Sur has undertaken 98 projects in the past two decades. The company constructed 40 roads, 45 buildings and Humera Airport. It has also worked on the dam at Welkayet Sugar Development Project which is constructed in northern Ethiopia. 
China has set its fingerprints as a major financer for the country’s energy development, more than other international financers. It is currently financing the Gibe III, GD III, and the transmission line for the Grand Ethiopian Renaissance Dam (GERD) and upgrading other transmission lines around the country.
China also has an interest in supporting other planned projects like the Chemeoga Yeda hydro electric power project.
By the end of the GTP the power project owner plans to increase power generation to 10,000 mw. The biggest ever energy project GERD was also launched during the second year of the five year plan. When the project is fully completed in 2017, it will generate 6,000 mw of electric power. In the beginning of the GTP the former EEPCo stated that about five hydro electric projects will be commissioned during the stated period. Azeb told Capital that the latest award for the two Chinese companies and a local contractor will be the last project signed during the GTP. She said that other electric projects like wind power will be awarded before the end of the year.