By our staff reporter
The Ethiopian Electric Power (EEP) has decided to independently complete the Aysha II Wind Farm project, which was initially funded by the Chinese Export-Import (Exim) Bank.
The Aysha project, located 20 kilometers west of the Djibouti border and near an existing international transmission line, is recognized as a highly viable initiative and has reached 83 percent completion to date.
Signed approximately nine years ago, the project was financed by the Chinese Exim Bank, according to Moges Mekonnen, head of public relations at EEP.
Under the original agreement, the Chinese bank was set to cover 85 percent of the total cost, while the Ethiopian government would contribute the remaining amount. However, Moges noted that only 40 percent of the total funds promised were actually disbursed by the financier.
The primary reason for the delay in funding was an increase in the country’s external debt risk, which compelled the Chinese contractor, Dongfang Electric Corporation, to continue the project for over five years without sufficient financing.
Moges informed Capital that the project has already surpassed 83 percent completion. He added that the wind farm began generating electricity two years ago and is currently producing 80 MW of the intended 120 MW capacity.
EEP leadership has now decided to use its own resources to complete the remaining portion of the project. According to Moges, EEP management has been tasked with allocating funds from the power purchase agreement with Tanzania to carry out the project.
If the power export agreement with Tanzania is finalized, the power company will receive foreign currency. Although the agreement, which was expected to conclude a few months ago, is still pending, EEP has decided to allocate funds now to expedite the project despite the delay in anticipated foreign currency from the power sales deal.
“The installation of 16 turbines will be the main component of the remaining work,” Moges stated. He added that the foundation’s civil work has been completed, and turbine manufacturing has begun in China. He expects the farm to be finished by the upcoming fiscal year.
The project, consisting of 48 turbines with a capacity of 2.5 MW each, is projected to cost USD 257.3 million. Located in the Sity zone of the Somali region, 680 kilometers east of Addis Ababa, the project is highly anticipated due to its potential to generate foreign currency through exports to Djibouti, which already receives Ethiopian green energy.
Dongfang, a Chinese giant, is experienced in Ethiopian power projects, having previously worked on various electromechanical projects, including hydro projects.
Since the government acquired local debt from the state-owned Commercial Bank of Ethiopia, EEP has maintained a stable financial position. According to EEP CEO Ashebir Balcha, the ongoing macroeconomic reform is expected to significantly enhance the standing of the large public company.
