Ethiopian Electric Power inks loan agreement with Standard Bank for upgrade of power sub stations
Ethiopian Electric Power and Standard Bank South Africa have signed loan agreement estimated at more than $100 million dollars aimed at financing the upgrade and rehabilitation of electric power sub-stations located in Addis Ababa.
The money secured by the loan agreement will finance 85per cent of the planned rehabilitation project. The Ethiopian government will provide the rest of the money. This loan agreement is the first loan promise made to the country after the bank opened its office a year ago in Ethiopia.
The project involves the upgrading of the aging 132 kv and 230kv power transmission line of the city.
This is the second loan signed by EEP in 2016. Three months ago, EEP signed a $104 million loan agreement with the African Development Bank for the implementation of the Meqelle-Dallol and Semera-Afdera Power Transmission Lines.
Last year, EEP utilized 15per cent of its $1.8 billion budget to pay for the interest on its loan. The figure is 37per cent higher compared to what its loan interest cost the company in 2013. IMF reported two weeks ago that the debt of state owned enterprises has reached around 57per cent of the country’s Gross Domestic Product (GDP).
The project also includes the development of two new substations, extension of three existing substations and building three new transmission lines within the capital city.
The money will go towards the upgrading and rehabilitation of Kotebe, Addis East, Shegole and Tikur Anbessa sub-stations and power transmission infrastructures in the capital.
The average per capita electricity consumption of the city has reached 105 kWh per year.
Azeb Ansake, Chief Executive Officer of EEP and Asenda Tsotso, Executive Export Credit Agency from South Africa’s Standard Bank signed the agreement two weeks ago.
Standard Bank Group opened its office officially in October, 2015 and it is governed by South Africa’s Standard Bank. The bank has also established an office in Kenya, South Sudan, Tanzania and Uganda.
Standard Bank South Africa was established a century ago and has a presence in more than 20 countries.
During the past fiscal year, the country secured a record amount of loan, 1.8 billion dollars in total, from the World Bank. The loan from the World Bank aims at different development goals including expansion for electricity. Until March 2016, the country’s public debt as a percentage of GDP stood at 55pc of the GDP.
Consolidated Power Projects Group Africa Limited (CONCO), a South Africa based company, has been awarded the rehabilitation project by EEP in March, 2016, with a total cost of $105 million. Established 30 years ago, CONCO has worked on over 20 substations across the African continent.
Addis East transmission line reached a completion rate of 70pc while Kotebe and Tikur Anbessa transmission lines are 60pc and 6pc completed, respectively.
The project is expected to be completed within the next seven months.
While the construction of transmission line connecting Legetafo with Kotebe then to Addis East is in the foundation process and expected to be complete on the coming seven months.
The construction of the transmission line covers 12.5 kilometers and involves a 494 kilo volt double circuit line installation.
The project has created jobs for over 1,500 individuals.
Currently, nationwide there are over 162 substations which are connected to the national grid and expected to reach 260 by end of the second Growth and Transformation Plan period.
In May 2016, EEP signed a $1.24 billion agreement with Larsen and Tourbo to build four substations. Then a month later it signed another $98 million contractual agreement to build a transmission line which supply electricity to two industrial zones of the country.
Currently, the electricity coverage in Ethiopia has reached 54per cent from 41per cent in 2009.
Meanwhile, the government plans to increase the energy generation capacity to 15,000MW and to expand the county’s electricity coverage from its current 55per cent to 99per cent by 2020.
