Ethiopia hopes to increase its power generation capacity 15-fold and become a significant exporter of electricity to the region.

At the foot of a towering gorge slicing through southern Ethiopia, the Omo river suddenly disappears into a tunnel bored into the rockface. Excavators claw at the soil and stone in the exposed riverbed beyond, where a giant concrete wall will soon appear in the ravine.

At 243 metres, the Gibe III dam will be the highest on the continent, a controversial centrepiece of Ethiopia's multibillion-pound hydroelectric boom.

The country that prides itself on being the “water tower of Africa” plans to end an energy shortage by building a network of mega dams on the web of rivers that tumble down from its highlands.

By 2020, with the help of Italian and Chinese construction firms, Ethiopia will, it hopes, have increased its power generation capacity 15-fold and become a significant exporter of electricity to the region.

“For a developing country like ours the dams are a must,” said Abdulhakim Mohammed, head of generation construction at the Ethiopia Electric Power Corporation (Eepco). “Power is everything.” But the pace and scale of the hydro projects have alarmed environmental groups, who say proper impact assessment studies are not being carried out.

Gibe III, which will have a generating capacity of 1,870 MW — double what was available in all of Ethiopia last year — has sparked the greatest opposition.

This week a coalition of campaign groups, including International Rivers, based in California, and Survival International, launched an online petition with the aim of stopping the dam, warning of potentially disastrous social and economic effects for tribes downstream.

“It's an unnecessary, highly destructive project,” said Terri Hathaway, Africa campaigner for International Rivers.

Nobody disputes the urgent need for additional electrical power in Ethiopia. In rural areas, where most of the 80 million Ethiopians live, only two per cent of households get access to electricity. A fast-growing economy and high population growth has caused the demand for electricity to rise by 25 per cent each year, according to Eepco.

The country's typography makes hydropower an obvious solution. Lake Tana, in Ethiopia, is the source of, and provides 85 per cent of the water for, the Blue Nile. The country also has another dozen large river basins. By some estimates, the country has got the potential to generate 45,000MW of hydropower.

While Ethiopia has approved plans for several new hydro schemes in the coming years, including a giant 2,100MW project on the Blue Nile, which will also serve Sudan and Egypt, a number of dams have already been built, or are almost complete. The 150-km-long reservoir created by Gibe III will stretch to the tail of the 420MW Gibe II power project, which was opened in January by the Italian builders Salini.

Further north, Salini is also constructing a power plant near Lake Tana, while Sinohydro, the Chinese firm that helped build the famous Three Gorges Dam, has just completed another.

Foreign currency source

The dam-building frenzy is, for some, about using the country's rivers as a valuable source of foreign currency. In the next few years Ethiopia plans to start transmitting power to its neighbours. Building of transmission lines to Djibouti and Sudan has begun, and a supply agreement has been reached with Kenya.

“The potential [for selling electricity] is tremendous,” said Mr. Mohammed. “We will eventually connect to Egypt and possibly on to Europe.”

The government strategy, though, faces a funding problem. With a price tag of £1.39 billion, Gibe III was always going to need external credit. But Ethiopia went ahead before financing was secured, and awarded the contract to Salini without tender and without completing an environmental impact study or consulting communities. The process violated the transparency policies of potential lenders. In 2008 an environmental study was finally published, and the African Development Bank, which is considering a loan, is now doing its own review.

While few people will be displaced by the dam, up to 500,000 people living further down in the Omo valley and around Kenya's Lake Turkana, which is fed by the Omo, could be adversely affected, says International Rivers. The dam will end the river's natural flood cycle, which herders and farmers have relied on for centuries, and cut the water level in Lake Turkana.

But the government has dismissed environmental concerns about Gibe III. And it is looking east for help. The Chinese state-owned Sinohydro has agreed to build the 1,600MW Gibe IV dam further down the Omo, with the Chinese government to provide the finance. — © Guardian Newspapers Limited, 2010

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