Ethiopia, Italy’s Salini sign hydro plant deal

July 20, 2006 (ADDIS ABABA) — Ethiopia on Thursday signed a contract with an Italian firm to construct a 1.39 billion euros ($1.75 billion) hydropower plant, hoping to increase local power generation capacity and to export the surplus to neighbouring countries.

The Gibe III hydropower plant, with a capacity to generate 1870 megawatts, is being built in Omo-Gibe River Basin some 240 km (149 miles) southwest of the capital Addis Ababa.

“In the global picture where oil is getting scarce and ever more expensive, hydropower is the white oil of Ethiopia, clean and renewable,” Claudie Lautixi, the general manager of Italy’s Salini Construction said at the signing ceremony.

Minister of Mines and Energy Alemayehu Tegegenue signed the contract on behalf of Ethiopia.

Lautixi forecast that after completion the project would be able to generate 300 million euros a year in revenue.

The dam, billed as one of the biggest in sub-Saharan Africa, is expected to be completed by 2011, according to the Ethiopian Electric Power Corporation (EEPCO).

The construction is being financed jointly by the Ethiopian government, the European Investment Bank, the African Development Bank and through contractor’s equity, EEPCO said.

Apart from Gibe III , three other hydro power plants costing a combined $1.4 billion and with an aggregate capacity of about 1,200 MW are also under construction, officials said.

“The construction of Tekeze hydro power dam with a capacity of 300 MW, Gilgele Gibe II with a capacity of 429 MW and Beless hydro power dam with a capacity of 435 MW will be completed by 2010,” Mihret Debebe, the general manager of EEPCO said.

(Reuters)