Ethiopia – Kenya High Voltage Power Transmission Lines to Start in September 2013

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By Macharia Kamau

Kenya-Ethiopia Electricity Line Gets $338 Million USD Boost

The construction of a high voltage electricity line running between Ethiopia and Kenya can now begin after the African Development Bank (AfDB) agreed to fund the project to the tune of $338 million USD.

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The electricity line is expected to provide Kenyan consumers with cheaper electricity from Ethiopia’s hydro- electricity dams and set the stage for inter-regional trade in electricity. The sale of power to neighbouring countries in East Africa is currently hampered by a lack of transmission infrastructure.

The total cost of the 1,068 kilometre electricity line is projected to cost $1.26 billion. Construction work is expected to begin in September for completion by 2018.

Other financiers for the project are the World Bank ($684 million), the Kenya Government ($88 million) and the Government of Ethiopia ($32 million). A further $118 million is expected from the French Development Agency.

“This project establishes power trade between Ethiopia and Kenya and the wider East Africa region. It not only improves electricity access at affordable prices and enhances cross-border trade, but also provides an important opportunity to generate revenue for countries having excess power generation capacity, as is the case for Ethiopia,” said Gabriel Negatu, AfDB’s regional director for the East Africa Resource Centre.

“The direct beneficiaries of the project are households, businesses and industries in Kenya. The interconnection with Ethiopia will ensure access to reliable and affordable energy to around 870,000 households by 2018.”

The project will also involve setting up AC/DC converter stations at Wolayta-Sodo (Ethiopia) and Suswa (Kenya) sub-stations, with a transfer capacity of up to 2,000 MW in either direction.

The Kenya Electricity Transmission Company (Ketraco) and Ethiopian Electric Power Corporation (EEPCO) will be the implementing agencies for the transmission line.

Ethiopia’s hydro-electricity sources have a capacity of 45,000 MW, but the country only utilises [2,150] MW.

Source: Standard Media

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Both banks will provide 80pc of the funds needed for the 1.26 billion dollar project. The WB will lend Ethiopia 243 million dollars and Kenya 441 million dollars. The AfDB is lending an additional 242.9 million dollars to the project.

The Ethiopian government will contribute 21.1 million dollars with the Kenyan government contributing 88 million dollars.

The project is expected to provide revenues to Ethiopia, through the export of electricity to Kenya, and increase the volume and reduce the cost of electricity supply in Kenya.

“It will also enable electric power-sharing between the two countries and pave the way for more regional cooperation between the countries of East Africa,” said Meheret Debebe, chief executive officer (CEO) of the Ethiopian Electrical Power Corporation (EEPCo).  “There is no doubt that cross border electricity interconnection and power trade has become a target for each country, due to its tremendous advantages to all the interconnected countries, in both economical and social aspects.”

The Memorandum of Understanding (MoU) of the project was signed in December 2009, between the Ethiopian and Kenyan governments.

When completed, the project will improve the access to affordable energy to around 870,000 households in Kenya and earn 500 million dollars a year for Ethiopia, according to data from the AfDB.

“The power trade strategy, to be developed under the power trade program study in the region, will enable the countries from the regional energy market, supported by the Ethiopia-Djibouti, Ethiopia-Sudan and Ethiopia-Sudan-Egypt power interconnections,” said Meheret.

The 1,070Km power line will run from Wolayta Sodo, in the Southern Region of Ethiopia, to Suswa, 437 Km northwest of the Kenyan capital city, Nairobi.

The line will have the capacity to carry 2,000 MW, with the power sources coming from hydroelectric projects in Ethiopia.

The loan agreement has already been approved by the banks and the draft tender document for the design has been submitted to the project office and it is expected to be finalised by the end of May, 2013. The project is expected to be completed in 2016.

“To realise the scheduled completion of the project, it requires cooperation and prompt resolution from all stakeholders and decision makers,” said Meheret.

Ethiopia has the potential to generate 45,000 MW electric power from single source hydropower, however, currently, Ethiopia is only generating 2,100 MW.

The government has envisioned increasing the present generating capacity to 10,000 MW, by the end of the 2015.

Source: Addis Fortune