US$20bn set aside for energy projects in Ethiopia

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The Ethiopian government has set aside US$ 20bn for power generation in the country for the period running 2015-2020. The project is part of the second generation of the Growth and Transformation Plan (GTP).

These plans for the energy project were disclosed during the Powering Africa: Ethiopia event held at the Radisson Blue Hotel last week. The main purpose of the event was to connect the government with local and interested international power infrastructure developers and financiers.

The government hopes to raise the money internally for the projects supplemented by loans. With the funds, it will build an additional 10-12 new power generating projects. The projects will utilize local construction materials as their main source as their main input.

The government hopes to generate 10,000MW of electricity once these energy projects have been completed.

It aims at increasing the energy generation capacity to 15,000MW during the second phase of the GDP and also improve the electricity coverage within the country from the current 55% to 99%. This will be done by developing renewable wind and geothermal sources.

The head of Strategy and Investment Division at the Ethiopia Electric Power (EEP), Mekuria Lemma indicated that the government is going to offer tax cuts to foreign investors as an incentive. Apart from government officials, foreign investors have also presented project proposals.

The country is currently undertaking construction of Adama II wind power generating farm, Gilgel Gibe III Hydroelectric and the Grand Ethiopian Renaissance Dam (GERD), among others.

Apart from this energy project, the Ethiopian Electric Power (EEP) late last month entered an agreement with US- based Green Technology Africa Inc. (GTA) worth US$600m for construction of a solar photovoltaic (PV) power generation unit to provide power to Dire Dawa, Kombolcha and Desse.