Home » Ethiopia Resorts to Unorthodox Funding Plan for Grand Renaissance Scheme
Ethiopia Resorts to Unorthodox Funding Plan for Grand Renaissance Scheme
February 16, 2013 · by Meles · in Meles Zenawi
Whether Orthodox or Unorthodox, the dam will be built!
By: John Muchira
Edited by: Martin Zhuwakinyu
Fears that construction of a mega hydroelectric plant in Ethiopia could stall owing to financial constraints have forced the authorities to turn to desperate measures to raise funds.
To ensure implementation of the Grand Renaissance dam project remains on course, the Ethiopian government in now turning to options like musical concerts, a lottery and an SMS campaign to raise funds after global financiers gave the project a wide berth.
A senior official says govern- ment is hoping to raise over $100-million through this strategy in the coming weeks to supplement funds being raised from donations and the sale of government bonds to finance the construction of the plant, which has a price tag of $4.8-billion. The project will have an installed capacity of 5 250 MW.
"As a country, we are com- mitted to implementing this project and the response from ordinary Ethiopians has been unprecedented," says Fekadu Ketema, head of communication at the National Secretariat, which is overseeing the implementation of the project.
However, the International Monetary Fund (IMF) has warned that mobilising large domestic resources and channelling them to one project could have dire effects on the economy.
Last year, IMF country representative in Ethiopia Jan Mikkelsen said the country's determination to fund the dam from local resources was starving the rest of the economy of funds.
The caution from the IMF and other critics of the project has done little to slow down its implementation as Ethiopia has made it clear the plant is critical to pushing the economy forward and will end the dependence on agriculture.
According to Ketema, Ethiopians are determined to implement the project and $500-milllion has been raised from ordinary citizens.
International financial institutions refused to fund the project owing to the manner in which the Ethiopian government awarded the construction contract and its failure to undertake a comprehensive environmental-impact assessment.
By the end of last year, about 14% of construction works had been completed and it is expected the project will be 26% complete by the end of this year.
The project, which is the largest hydropower plant in Africa, is being constructed by Italian company Salini Costruttori and is slated for completion in 2015.
The dam is being constructed on the Blue Nile and is touted as the solution to Ethiopia's perennial energy deficit.
Meles Zenawi Laid the cornerstone for Great Millennium Dam of the Blue Nile, Ethiopia, Part 1 of 2
Ethiopia to Celebrate 2nd Groundbreaking Anniversary of GERD
Addis Ababa February 20/2013 The second groundbreaking anniversary of the Grand Ethiopian Renaissance Dam (GERD) will be celebrated with various assortments, the National Coordination Council for Renaissance Dam said. Media and Communication Director with the Council, Fekadu Ketema, told ENA on Wednesday that discussion forums, sports and music festival, among others, will be organized as part of the event.
The late Prime Minister Meles Zenawi on 2 April 2011 had laid the foundation stone for the construction of the Dam, which will cost the country 80 Billion Birr or about $5 Billion USD.
The Dam, being constructed in Guba Woreda of Benishangul Gumz State, will have a capacity to generate 6000 MW electric power. Ethiopia covers the entire cost for construction of the Dam, which will be the largest hydroelectric power plant in Africa when completed. It will also create the country's largest artificial lake, with a capacity of 63 billion cubic meters of water, twice the size of Lake Tana, the source of the Blue Nile.
Source: ena.gov.et
The speech made by the late PM Meles Zenawi of Ethiopia at the official commencement, groundbreaking ceremony of the Grand Ethiopian Renaissance Dam (GERD) project.
Translated from Amharic
April 02/2011
Guba, Benishangul Gumuz
Honorable peoples of Ethiopia
First and foremost, on behalf of the Ethiopian government and of myself, I must express my heartfelt pleasure for the opportunity to attend this occasion, marking the official commencement of the construction of the Millennium Hydro-electric Nile Dam. I must congratulate all those who have worked so tirelessly to make this defining moment possible.
We have gathered here today at the largest of our rivers to witness the launch of this great project. It is rightly called the Millennium Dam. It is the largest dam we could build at any point along the Nile, or indeed any other river. More importantly the project takes the pride of place, representing an incomparable addition to our national plan for expanding power production. It will not only raise our own power-generating capacity and meet our domestic needs. It will also allow us to export to neighboring countries and mobilize the resources so necessary for the realization of objectives for our rapid development endeavors, efforts which are already yielding promising results.
The plan allows for the generation of six to eight thousand MW in the coming five-years. Of this total, the Millennium Dam alone will have the capacity to produce 5,250 MW to assist in meeting our aims. After completion, the Dam is expected to hold 67 billion cubic meters of water. This will provide a reservoir almost twice the size as Lake Tana, a natural lake which only reaches 32 billion cubic meters at its peak. The Millennium Dam will be the largest man-made lake in Ethiopia, and it will also, of course, provide for extensive opportunities for fisheries and cultivation which were previously non-existent.
From every perspective, this project will play a major and decisive role in realizing the five-year Growth and Transformation Plan and the consequent advance towards the eradication of poverty. The potential impact is clear to everyone. Its importance is readily apparent when we see that this Dam alone will provide for between 65 and 87 percent of the entire power supply we expect to generate over the period of the plan. Equally, the benefits that will accrue from the Dam will by no means be restricted to Ethiopia. They will clearly extend to all neighboring states, and particularly to the downstream Nile basin countries, to Sudan and Egypt.
The Dam will greatly reduce the problems of silt and sediment that consistently affect dams in Egypt and Sudan. This has been a particularly acute problem at Sudan's Fosseiries dam which has been experienced reduction in output. When the Millennium Dam becomes operational, communities all along the riverbanks and surrounding areas, particularly in Sudan, will be permanently relieved from centuries of flooding. These countries will have the opportunity to obtain increased power supplies at competitive prices. The Millennium Dam will increase the amount of water resources available, reducing the wastage from evaporation which has been a serious problem in these countries. It will in fact ensure a steady year-round flow of the Nile. This, in turn, should have the potential to amicably resolve the differences which currently exist among riparian states over the issue of equitable utilization of the resource of the Nile water.
In other words, the Millennium Dam will not only provide benefits to Ethiopia. It will also offer mutually beneficial opportunities to Sudan and to Egypt. Indeed, one might expect these countries to be prepared to share the cost in proportion to the gains that each state will derive. On this calculation, Sudan might offer to cover 30 per cent and Egypt 20 per cent of the costs of the entire project. Unfortunately, the necessary climate for engagement, based on equitable and constructive self-interest, does not exist at the moment. Indeed, the current disposition is to make attempts to undercut Ethiopia's efforts to secure funding to cover the cost of the project. We have, in fact, been forced to rely on our own savings alone to cover the expense.
The estimated cost will be 3.3 billion Euros, or 78 billion birr. As we will be financing several other projects in our plan, the expense will be an additional and heavy burden on us. All our efforts to lighten this have been unsuccessful, leaving us with only two options. Either to abandon the project or do whatever we must to raise the required funds. I have no doubt which of these difficult choices the Ethiopian people will make. No matter how poor we are, in the Ethiopian traditions of resolve, the Ethiopian people will pay any sacrifice. I have no doubt they will, with one voice, say: "Build the Dam!"
National resolution may be indispensable, but it is not, however, sufficient. If we are to find development finance, we have to raise our financial weight by developing the culture of saving. The government will do everything possible to raise funds through increasing revenues and being careful of its expenditure. All the banks will be expected to actively promote and to accumulate savings. Importantly, the Ethiopian people will also be able to contribute their share in bringing the construction of this historic Dam to completion. To enable every Ethiopian to do this * the government has launched treasury bonds offering five per cent interest. Buying these bonds will allow all Ethiopians to benefit from the interest paid, and play their part in the completion of the construction of the Millennium Dam according to their income.
Honorable Peoples of Ethiopia,
By mobilizing to build this Grand Millennium Dam with our own resources we will derive significant economic benefits. We will also convey two messages.
As you all know, and our rapid economic development activity has underlined, we are determined to eradicate poverty from our country. We are fully aware that in this struggle against poverty, many friends stand with us; our gratitude to our development partners is limitless. Before we mobilized our efforts to eradicate poverty, centuries of impoverishment curtailed our development and restricted us from exercising our right to use the resources of our own rivers. Now, thanks to the dedication of our peoples, we have safely put those times behind us. We are close to opening a new chapter through the realization of our Millennium project. Henceforward, nothing can stop us from exercising our rights; the other dams we plan to build are less challenging than this, the Millennium Dam. So, the first message is that we not only have a plan, but we also have the capacity to assert our rights.
The second message we want to send is that the intention to exercise our rights to use our own rivers is in order to fight poverty in our own country. It shows no malice to any of our neighbors. Among the concerns we factored in when we made the decision to build the Nile Dam with our own resources, was to avoid any negative consequences for our neighbors and indeed to offer positive benefits for all of them. I would dare to say that nothing can provide a better testimony of our deepest commitment to forge a lasting partnership between all the Nile Basin riparian countries than the building of the Millennium Dam.
On this occasion, therefore, we, the peoples of Ethiopia, call upon all the peoples of the Nile Basin to turn over to a new page of cooperation and solidarity. As we in Ethiopia build this Millennium Dam with the aim of eradicating poverty, let it be known to all that it will also stand as an expression of our commitment to the benefit of all the countries of the Nile Basin.
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Tags: Bond, Dam, Ethiopian Grand Renaissance Dam, Martin Zhuwakinyu, Meles Zenawi
hasileah February 20, 2013 at 3:48 pm · Reply →
All Ethiopians are in this together. We have a proud history of how we defended our country;we are history makers , The only way to get out of our problems is to act independantly regardless of some speculations that flys around. We need to continue to rise up above and beyond and will come out of this victorious.
May god bless Ethiopia and our people.
* Must solve this simple Math question by typing a numeric value *
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