Ethiopia is set to receive US $1.8bn from the State Grid Corporation of China to improve electricity transmission and distribution networks across the country.
Ethiopia’s Prime Minister, Abiy Ahmed who signed the agreement China Export and Credit Insurance Corporation (Sinosure) said the government has set out a plan to construct 9,000km of distribution lines and 19,600km of transmission line.
“Ethiopia has made the development of its estimated 60GW of renewable energy a cornerstone of its 15-year Growth and Transformation Plan. The country now has about 4.5GW of installed capacity for a population of more than 100 million whose demand for power is growing at about 30% a year,” said the Prime Minister.
Access to electricity
Ethiopia plans to increase its current 4,300 MW electricity generation capacity to 17,300 MW by 2025, with power generation projects in hydro, wind, geothermal and biomass sectors.
At present, 30% of the country has access to electricity and, in areas where there is grid coverage, only 60% of households are connected. Lack of funds and foreign debts according to Mr. Abiy Ahmed is putting a brake on infrastructure investment such as construction of Ethiopia’s electrified railway between Awash and Hara Gebeya which has made little progress in the past nine months due to lack of funds.
Dagmawit Moges, the transport minister, told the Ethiopian parliament that the construction of the project, which stretches from the eastern to the northern part of the country, has only managed to reach 54% completion over the past five years.
Cancelling accumulated debts
However, a total of 17 projects were unveiled by the Ethiopian government late 2018, out of which three were road construction projects while the remaining 14 were power supply projects.
Spokesperson of the Ethiopian Ministry of Foreign Affairs, Nebiat Getachew acknowledged that Ethiopia and China already enjoy multifaceted ties, which are expected to be further strengthened with the introduction of new partnerships. During the Prime Minister Abiy’s visit, China agreed to cancel all interest accumulated from its debts, estimated at between US $12bn and US $20bn.
The power project, which is involving eight major cities, will mainly benefit the grid system of the Ethiopian capital, Addis Ababa. The seven other cities are Jimma, Dire Dawa, Bahir Dar, Mekele, Hawassa, Adama and Dessie.