Addis Ababa, 9 September 2014 (WIC) – SUR Construction PLC teamed up with two giant Chinese companies to build a new hydroelectric dam in Illu Aba Bora and Jimma zones of Oromia region.
Representatives of the contractors on Monday signed a 583 million USD agreement with Ethiopian Electric Power (EEP) to build the Geba Dam, which will have 391 MW installed power generating capacity.
In the past, SUR teamed up with the same Chinese companies – Sinohydro Corporation and China Gezhouba Group Company (CGGC) – to build the Tekeze dam, a 300 MW hydroelectric dam in Tigray region.
CGGC was also the contractor for Fincha Amerti Neshe (97 MW) and is currently building the Genale Dawa III hydropower project, a 254 MW hydroelectric dam on the border of Oromia and Somali regional states.
Based on the contractual arrangement, SUR will have 25 percent share of the project while Sinohydro and CGGC take a 40 and 35 percent share, respectively.
“Depending upon our performance, our share in the project could rise up to 40 percent, making us the lead partner,” Tadesse Yemane, general manager of SUR, told WIC.
The local company is expected to undertake the construction of two rock-fill dams, spillways and roads with its experts also participating in tunneling and foundation treatment.
“The project will, undoubtedly, contribute for knowledge and technology transfer to our local companies,” Alemayehu Tegenue, minister of Water, Irrigation and Energy, said.
‘Low cost’
Pending a loan approval process, 80 percent of the Geba Dam project will be financed by the EXIM bank of China with preferential credit modality.
“Compared to other similar hydropower projects, Geba is found to be reasonably low cost power plant,” Azeb Asnake, CEO of EEP, said during the signing ceremony.
Located some 540 km south west of Addis Ababa, the Geba Dam is a priority project planned for completion during the second phase of the Growth and Transformation Plan (GTP II).
The hydropower plant, which constitutes Geba I (226 MW) and Geba II (165 MW), is expected to be completed in four and a half years.
“The [joint venture] will pre-finance the project construction works and commence immediately without waiting for the approval of the loan,” Azeb expressed her hope.
The dam is also expected to create a possibility for the irrigation development of some 480,000 hectares in the lower Geba plane.
The launch of the project takes the number of hydroelectric dams under construction to four including Genale III, Gibe III (1,870 MW) and the Grand Ethiopian Renaissance Dam (6,000 MW).