The Ethiopian Electric Power (EEP) discloses that power transfer tests will start next week for the second pole of the Ethio-Kenya transmission line which officially began exporting energy to the bordering nation.
During the latest visit of top officials from Commercial Bank of Ethiopia and media at the Wolayta Sodo Converter Station, which is aligned with the Wolayta Sodo Substation which was erected about a decade ago to manage the power coming from Gibe III, Habtamu Girma, Operation Head of the Converter Station, explained that the first pole of the transmission line is fully functional and had begun power export a week ago.
The operations head explained that through the testing period, 65 MW of power have been exported, “And now we have successfully accomplished the test of up to 200MW.”
As per the project design, the two poles will each have a capacity to transfer 1,000 MW of power. As a result, as per the current plan, the export would be up to 250 MW, “Hence, the first pole has the capacity to accommodate the current export scheme.”
According to Habtamu, the second pole test will be undertaken as per the schedule, which is early this week.
The High-voltage direct current (HVDC) Converter Station which is located about 10 kilometers North West in the outskirt of Wolayta Sodo town is the EPC project carried out by Siemens AG of Germany at a cost of USD 214.5 million.
Besides converting energy from AC to DC, the state of the art facility has also additional features for the sector in Ethiopia, which includes the setup of ground electrode lines, installed about 22 km south of Wolayta Sodo town.
Tewodrose Ayalew, Project Manager of the HVDC Converter Station, told Capital that the ground electrode lines are an alternative means of transmission lines besides the two poles.
He said that the technology applied on the project is crucial to keeping power supply fluctuations at bay for the client in Kenya.
According to Kibrom Kahssay, Executive Officer of EEP for the Transmission and Substation Construction Project, the project is a big move for the sector in the country since it applies one of the rear technologies not only for Ethiopia but also for the continent.
“The technology applied on the current project targets to minimize power wastage and ensures the supply of sustainable power in addition to financial viability,” Kibrom explained.
Experts at the site said that the facility has a capacity to ensure uninterrupted and reliable transmission of power.
The Executive Officer said that as per the initial stage of the agreement between the two countries that will end in the coming three years, 200 MW energy will be exported to the neighboring country generating over USD 100 million per annum.
In the second three year phase, the export amount will be 400 MW which will double the revenue while in the future the facility will have a capacity to carry 2,000 MW. At this stage the country will generate USD one billion from the export of energy up to South Africa.
“Besides the financial benefit the project has a good implication for the regional integration and has socio-economic benefits for the region,” he added.He said that at the current stage, the export is carried out on a trial level but it is operating successfully.
The transmission line, protection and data communication line (optical ground fiber) extended through the Ethiopian border is 440 kilometers long and has 994 towers. The transmission line project which is managed by the Chinese CET consumes about USD 120 million and has the capacity to regulate 500 KV.
As per the agreement between the two sides, Ethiopia would sale its electric power at a price of 6.5 US cents per one-kilo watt for the coming five years which will be revised after the end of the first five year period.
Second power transfer tests to Kenya to start next week
The 8th International Congress “SKIN ON THE MOVE” successfully held across Ethiopia
The 8th edition of the International Congress “Skin on the Move”, by the title “Tropical Neglected Skin Diseases, Global Health and COVID-19 Pandemic”, has been held from November 21-16 in Addis Ababa, Arba Minch and Sodo.
This Edition 2022 was promoted by “Regina Elena” National Cancer Institute and ”San Gallicano” Dermatological Institute in collaboration with Ethiopian Research and Medical Institutions such as the University of Wolaita Sodo Teaching Referral Hospital and St. Paul’s Hospital Millennium Medical Collage.
The Congress study and debate were centered on crucial questions about Tropical Neglected Skin Diseases and Global Health also in relation to the COVID-19 Pandemic.
Dermatologists, health professionals and all specialists including students participated on the congress in promoting and supporting research, strengthening primary health systems, studying the socio-political and cultural contexts, improving collaboration between local communities and health workers and promoting a global health idea to improve the lives of people around the world.
The scientific program consisted of clinical sessions, held in local public facilities in remote areas, workshops, state-of-the-art lectures and free discussions with distinguished experts from all over the world.
The program was launched on Monday November 20, 2022 at the Italian cultural institute with the presence of Italian ambassador, Augustine Palese and various guests.
Leather industries call for change in forex surrender
No foreseeable change, cite central bank officials
Leather industries request the government to remove the 70/20/10 forex surrender as foreign currency shortage takes a tight grip on their business. Officials from the national bank have however underlined that there will be no change soon.
Leather industries through their association, the Ethiopian Leather Industries Association (ELIA) have submitted their request to the National Bank of Ethiopia (NBE) calling for a reduction of retention to 50/50 surrender.
“Most of leather industries are working under their capacity and some have stopped their production due to shortage of inputs,” said Solomon Getu, Secretary General of the association which has 167 members.
As he elaborates, most of the chemicals and machineries for the leather industries are imported and with the shortage in hard currency, the necessary components are now out of reach.
“It’s been a year since our members received foreign currency from banks. We are now asking for the access of forex which we got through products export,” said Solomon.
“They can request, however, as the decision is made by the government so far there is no lead in making changes, at least not for now,” said Fikadu Digafe, vice governor of NBE whilst commenting on the issue.
“If this policy is not changed it will be difficult for industries to continue in both production and export,” emphasized Solomon.
According to the national bank directive amendment of retention and utilization of foreign currency no 79/2022, banks are required to surrender 70 percent of the foreign currency earnings from export of goods and services, similar to remittance and NGOs who ought to transfer to the national bank. Exporters of goods and services and recipients of inward remittance get only 20 percent of their export earning in foreign currency after deducting 70 percent to the central bank. The remaining 10 percent is surrendered to the respective bank.
Experts argue that the directive encourages the parallel black market in forex trading; which currently has a significant gap compared to the legal market in terms of exchange rates offered.
It is widely thought that the surging inflation and a shortage of hard currency in Ethiopia are driving up the price of the US dollar on the black market.
Due to the increased demand for foreign currencies, the dollar exchange rate at the parallel market skyrocketed making the official and parallel markets to drift exponentially apart.
Commenting on the issue Fikadu said, “The parallel market has been going at 100 birr and above per dollar. Now the value is between 92 and 94 birr. The actions we have taken have stopped it from daily increase. However, it is difficult to fully destroy it.”
Over the past ten years, the Ethiopian birr has depreciated significantly against the U.S. dollar, primarily through a series of controlled steps. Over the past years, everything has been changing so fast and exchange rates are rapidly fluctuating due to the political uncertainty in the country. The conflict in Northern Ethiopia and the instability in most parts of the country are among the factors that are said to have contributed to the skyrocketing exchange rate of foreign currency.
Previously, exporters and inward remittance earners were required to surrender 50% of their total earnings to NBE. Amount of proceeds to be retained has significantly decreased: Under the Old Directive, retaining 40% of the total foreign currency earning for indeterminate period of time in a retention account was permitted after deduction of the 50% surrender requirement. The remaining 10% of foreign currency amount was required to be surrendered to the respective commercial banks based on the prevailing exchange rate and using the buying rate.
Standard Bank executives to visit Ethiopia this week
After the Council of Ministers approved the long-awaited policy that allows foreign banks to operate in Ethiopia, the Standard Bank Group is embarking on a stakeholder engagement drive in Ethiopia this week.
The bank’s CEO of Africa Regions, Yinka Sanni, will be leading a series of meetings between November 30 to December 2, 2022, with various partners, clients, and stakeholders including Ethiopian government officials, as well as the banks clients operating in Ethiopia.
According to a statement sent to Capital from the bank, the meetings are aimed at fostering long-lasting and trusted partnerships in supporting continued economic growth in the market.
“The establishment of Standard Bank’s representative office in 2015 in Addis Ababa has provided an entry point for clients seeking to invest in Ethiopia. As Africa’s largest bank by assets, the Standard Bank is committed to Ethiopia, which remains a vital market for our clients seeking investment opportunities with the potential of driving development in the region,” the statement sent to Capital reads.
“We believe that we are uniquely positioned to support the government’s plans in attracting more investments into the country through our client base on the continent and facilitating the financing on their behalf,”says CEO of Africa Regions, Sanni.
“Over the last decade, Ethiopia has emerged as one of Africa’s most profound growth stories. This growth has been driven by structured government development plans, positioning Ethiopia as a regional industrial hub and global aviation centre,” he added.
Ethiopia is also emerging as a major energy hub in East Africa and is leading the continent in the development of green energy.Much of Africa’s potential in respect of hydro, wind, and geothermal energy is concentrated in the country, together with neighbouring Kenya.
As a result, investment is focused on supplying reliable power to Ethiopia. Standard Bank has assisted in finding sustainable solutions for Ethiopian Electric Power’s (EEP) funding requirements and supporting this critical power build.
Other investments in the country include Standard Bank’s structured USD 75 million in financing facilities forthe opening of Coca-Cola Beverages Africa’s bottling plant in Sebeta located on a 14.4-hectare plot,which is set to bolster the country’s manufacturing capacity and expand production of local beverage products.
Standard Bank has an already extensive East African footprint, with operations in Tanzania, Uganda, Kenya and South Sudan, and a representative office in Ethiopian.
Standard Bank Group is the largest African bank by assets, operating in 20 African countries and 5 global financial centres. Headquartered in Johannesburg, South Africa, it is listed on the Johannesburg Stock Exchange and the Namibian Stock Exchange.
