Archive for April, 2010
The Ethiopian Sugar Development Agency (ESDA) is expected to sign an agreement on Monday, April 27, 2010, with the UK based ED&F Man Sugar Limited Company for the supply of 40,000tn of sugar.
The company agreed to supply a tonne of sugar for 565.50 dollars. This is lower, by almost 300 dollars, than the price of the contract awarded to the UK company and Louis Dryfus of Sweden, four months ago, for the supply of 50,400tn of sugar at 831 dollars per tonne.
“This is the time of the Brazilian production year, and the Indian market is also in a good position,” Habtamu Regassa, head of Foreign and Local Trade Directorate at ESDA told Fortune.
According to Habtamu this is the reason the international sugar price came down.
The delivery of the sugar from the UK company is planned to arrive in May and June.
In addition to this, the agency will float a tender to buy 60,000tn of sugar.
The height of the sugar crisis occurred in February, when the price of sugar reached 16 Br to 18 Br per kilogramme.
In light of the problem, the ESDA planned to import 800,000ql of sugar from abroad this fiscal year. Still, the Ministry of Trade and Industry (MoTI) ordered it to import an additional 500,000ql of sugar.
The three state owned sugar factories, Metehara, Wonji Shoa, and Fincha produce three million quintals of sugar annually.
However, the country’s sugar demand rose to 4.6 million quintals per year; this being the reason for the government to import sugar.
Last week, on Monday, April 19, 2010, the ESDA opened a tender to sell 70,000ql of sugar with the average price being 1,288 Br per quintal.
“Currently, the market has eased since we flooded it with 386,000ql of sugar,” Habtamu said.
This is the largest amount of sugar ever to be distributed in the Ethiopian market within one month, according to Habtamu.
Apart from the private sector, the two state owned marketing enterprises, Merchandise and Wholesale Import Trade Enterprise (MWITE) and Ethiopian Fruit and Vegetable Market SC (Etfruit), are also engaged in the trading of sugar.
April 19 (Bloomberg) — African flower and vegetable exports to Europe have been halted by flight restrictions on the continent and are unlikely to resume before the end of the week, industry associations said.
“Nothing is getting into Europe,” Rene Schoenmaker, chairman of the South African Flower Growers Association, said by mobile phone today. The country earns about 400 million rand ($54 million) a year selling flowers, mainly proteas and other indigenous plants, to Europe.
“We won’t be able to send out anything until the end of the week,” Schoenmaker said.
As many as 81,000 flights have been canceled after an April 14 eruption of the Eyjafjallajökull volcano in Iceland spread dust and ash across Europe’s airspace, closing airports from Dublin to Moscow. The closures have curbed imports from Africa of goods ranging from courgettes to roses.
In Kenya, farmers are losing income of about 231 million shillings ($3 million) a day because normal daily shipments to Europe of about 1,000 metric tons of produce have been stopped, the Daily Nation, a Nairobi-based newspaper, reported today.
“I feel bad, but it’s an act of God, we can’t do anything,” Erastus Moreithi, a rose grower and former chairman of the Kenya Flower Council, said by mobile phone today. Moreithi, who grows about 40 million stems a year, will have to destroy the flowers that were meant for export.
Flower and vegetable farms in Ethiopia have lost 1.75 million euros ($2.36 million) so far.
“We have lost something like 700 tons” since April 15, Haileselassie Tekle, director general of the Ethiopian Horticulture Development Agency, told reporters today in the capital, Addis Ababa.
The Horn of Africa country, which trails Kenya as the biggest seller of roses at the world’s largest flower market in Amsterdam, may lose an additional 5.3 million euros over the next two weeks unless air freight to northern Europe resumes, said Tsegaye Abebe, chairman of the Ethiopian Horticulture Producer Exporters Association.
Ethiopia plans to export about $180 million of flowers, mainly roses, in the fiscal year ending July, according to Tsegaye. It will also ship about $40 million of horticulture products, including strawberries and herbs.
The flower industry is attempting to ship to European cities like Victoria, Spain and Marseille, France where airports remain open, according to Haileselassie. The stems will then be transported overland for two days to markets in Amsterdam and elsewhere, he said, a delay that will increase spoilage.
Europe accounts for more than 80 percent of Ethiopia’s flower exports, Tsegaye said. Flowers are the country’s fourth- largest export and the industry employs about 50,000 people.
While South African exports of highly perishable vegetables such as courgettes are affected, shipments of fresh produce have been largely unaffected because most of it is exported by sea, said Stuart Symington, chief executive officer of South Africa’s Fresh Produce Exporters Forum, by phone from Cape Town.
Stephen Mbithi Mwikya, head of the Fresh Produce Exporters Association of Kenya, didn’t answer calls to his landline or mobile phones. Kenya’s Flower Council said it will issue a statement later today.
–Editors: Paul Richardson, Antony Sguazzin.
To contact the reporters on this story: Carli Lourens in Johannesburg at email@example.com
“People who are already poor and marginalised are struggling to cope with the added burden of increasingly unpredictable weather,” said Abera Tola, Oxfam’s Horn of Africa regional director. “It is getting harder and harder for families and communities to bounce back from ever-changing, inconsistent weather affecting their livelihoods, and many have been forced to sell livestock or remove children from school – coping mechanisms that only increase the cycle of vulnerability.”Ethiopia is one of the poorest countries in the world and eighty-five percent of the population depends on agriculture for their livelihood. The agricultural sector is especially vulnerable to the adversities of weather and climate since it is rain fed, done using relatively basic technologies, and on tiny plots of land.
“From the Rift Valley to Tigray, farmers and pastoralists around the country have shared with us the toll that the changing weather is having on their communities, from ruined crops to dying cattle,” said Tola. “Even relatively small shifts in the growing season, can spell disaster for the poorest farmers and pastoralists who are already struggling in poverty.”Women and girls in particular are disproportionately affected by climate variability. In times of crisis, women tend to stay home with their children, while men move away to look for alternative means of survival. Women also have fewer options to find other ways of making a living, especially since women’s literacy rate is not even half of that of men. Women are also not given a say in household decisions and are frequently without cash savings or assets to sell to buy food and other basic items.
“The rain doesn’t come on time anymore. After we plant, the rain stops just as our crops start to grow. And it begins to rain after the crops have already been ruined,” Sefya Funge, a farmer in Adamitullu Jiddo Kombolcha district in Ethiopia told Oxfam. “Because of a lack of feed and water, most of my cattle have died. The few that survived had to be sold so that we could buy food to live on. As I no longer have the means to support my family, only three of my eight kids are still with me. Losing our assets was bad, but the fact that our family is separated is devastating.”With some assistance from non-governmental organisations and the government, small-scale farmers and pastoralists are adopting a variety of coping mechanisms, according to the report. In the farming areas, many are shifting to more drought tolerant crops and varieties, improved forest management practices, diversified energy sources, and alternative means of income from off-farm activities. Pastoralists have also divided pasture into wet and dry season grazing areas to better manage risk, while others have changed the composition of their heard from cattle to camels and goats, which can better tolerate dry, hot weather.
Poverty, limited resources, little alternative sources of income and livelihoods, lack of knowledge and expertise, and the absence of appropriate public policies and financing, increase vulnerability and decrease people’s capacity to cope.Oxfam has made several recommendations – at the national, regional and community level – for the development of a holistic approach to increase resilience, so communities can bounce back from climatic shocks quicker.
Recommendations at the national level include:Prepare and implement a national framework for guiding climate change adaptation and mitigation, . building on the National Adaptation Program of Action (NAPA) and integrated with the Plan for Accelerated and Sustained Development to End Poverty (PASDEP)
- Investing in agricultural research on the use of new crop varieties and livestock species that are more tolerant to drought.
- Ensuring civil society and community participation, especially women’s groups, both in formulating climate change policies and in integrating climate change into development priorities.
- Ensuring priorities and investments address the gendered impact of climate change.
- Strengthen cooperation among policymakers, nongovernmental organisations, research institutions, and the media.
Recommendations at the community level include:
- Investing in livelihood opportunities and risk management strategies for poor farmers and pastoralists, particularly women.
- Investing and improving agriculture extension services
- Preparing long-term adaptation plans based on the sharing of best practices through community participation, civil society engagement, and the participation of academic and research institutions, with regular monitoring to identify promising practices for scaling up.
- Building on what farmers and pastoralists are already doing to adapt to climate variability and change. Investigate these practices further for their sustainability and impact on poverty and inequality, and potential for replication or enhancement.
- Investing in new forestation programs, reforestation, and sustainable management of the remaining forests. Ensure that management systems guarantee a return to the communities that manage the resource-the only way to ensure genuinely sustainable use of forests and woodland.
- Investing in community environmental and drought monitoring systems and improve community disaster risk reduction capacity.
- Increasing use of renewable energy such as solar energy and promoting photovoltaic technology.
Oxfam has also asserted that developed countries have the responsibility to not only reduce emissions that cause climate change, but also help Ethiopia adapt to climate change impacts that will still affect the poorest, no matter how fast we reduce emissions.“Climate change is impacting the poorest first, despite the fact that they didn’t contribute to the crisis,” said Tola. “As global climate change negotiations continue, world leaders must not forget the fact that poor people are dealing with the negative impacts of a changing climate every day.”
More from the Oxfam Press Office at
[ Any views expressed in this article are those of the writer and not of Reuters. ]
Fairer trade is the best way to lift Africa out of poverty. Yet the main parties’ international development policies focus only on aid
By Ela Soyemi
This week the three major parties launched their election manifestos and have all promised to stay in line with “the UN target of spending 0.7% of gross national income by 2013.
Labour’s manifesto outlines that “in Africa, Labour has made aid, trade, conflict prevention and good governance a priority”. But if passion can be measured in wordage, it is clear that a future Labour government will be clearly on the side of aid over trade where developing countries are concerned (a very small paragraph is dedicated to say, very basically, that trade is useful). Speaking in his South Shields constituency on Monday, the foreign secretary David Miliband reiterated the commitment: “Think about how we’ve increased international aid budgets,” he said. So Bob Geldof will be happy, but African nations interested in taking charge of their own fates should beware.
The Conservative’s only mention of stronger trade deals for developing countries is to say: “Trade and economic growth are the only sustainable way for developing countries to escape poverty … we will put maximum effort into achieving an ambitious, pro-development global trade deal.” Well, those well-versed in the north-south global economic dialogue will perhaps wish to believe this when they see it.
And as for the Liberal democrats, there is no mention of trade with developing countries at all.
The big issues are rightly marked out in both the Labour and Tory manifestos – human rights, democracy and freedom – but the economic strength that many African nations desperately crave in order to be partners and not subjects to their western “helpers” will be capped at the knees if a real effort is not made to ensure that their voices are taken more seriously at the current trade negotiations at the WTO, the Doha round.
Let’s not fool ourselves here – many African countries have themselves to blame to a certain degree for some of the failures at Doha. But in a world in which aid is actively celebrated not just by serious academics and national governments but by the aforementioned saviour of Africa’s starving children, it is increasingly difficult for those who see trade as a more sustainable way forward for many African countries to lift themselves out of poverty, political under-development and towards becoming societies where governments are held to greater account. And with my groan, there will continue to be those who ask what more any given poor African country wants from the western world.
To answer, let me borrow a thought from a great literary figure: work is redemptive. In the global economic framework, “work” equals trade. And while the Labour manifesto makes a commitment to quadruple funding for fair trade – and no one begrudges the individual Kenyan farmer who directly benefits from the conscience decision of the western coffee consumer – national economies are built on free trade.
Britain and the rest of the world must support building a successful and conclusive Doha package that works just as well for developing countries as it does for developed ones. That is probably asking too much because it is unlikely that the WTO will work equally for both north and south for some decades to come. But a start can be made on making provisions to significantly increase the global exports of least developed countries, easing up on tariffs and making intellectual property regulation more flexible – and then are the technical implementation issues, few of which have been solved.
David Cameron may feel that Britain is developed enough not to need its state any longer, but I can assure you that most African countries are not so blessed. African governments, almost without exception, need to get more positive results from the conclusion of Doha. Regardless of problems of corruption, bad governance and anything else one may wish to think of, preventing better trade deals for African countries only has the effect of ensuring that we continue to feel sorry for Africa because it does not have the economic capacity to help itself. Let me tell you – nobody feels sorry for China.
It is also notable that one of the Tory manifesto’s foreign policy pledges is to “support permanent seats on the United Nations Security Council for Japan, India, Germany, Brazil and African representation”. The view that by giving Ghana, Nigeria or South Africa, let’s say, a seat on the Security Council, the African continent will be satisfactorily represented is, of course, little to do with David Cameron or William Hague but it still irks. Britain’s UNSC seat is British representation, not Europe’s and so on and so forth.
Meles discussed on duties and responsibilities of the EU Election Observation Mission in making the upcoming national elections free, peaceful, democratic and fair with the Mission which is in Addis Ababa now.
Meles said the Mission should observe the election freely and impartially and discharge its responsibility effectively.
He further said the government is desirous that the EU Election Observation Mission to observe correctly and honestly the election, according to a Spokesperson of the Ministry of Foreign Affairs.
Speaking on his part Beman said expressed the readiness of his Mission to observe the election correctly and honestly.
He further said the EU Election Observation Mission would discharge its responsibility effectively.
The EU Election Observation Mission is expected to give a news conference regarding its observation mission in Ethiopia.
By Solomon Bekele
A Chinese firm is to build a new stadium for Ethiopia’s St George Football Club in two years’ time. In a signing ceremony held at Sheraton Addis on Friday, April 9, the oldest and arguably the country’s most popular sports club, St. George, made an agreement with the Chinese Jiangxi construction firm, known as CJIC, to build the new stadium for 247 million birr in the CMC area. At the signing ceremony, St. George’s board chairman Ato Abinet Gebremeskel revealed the construction will start in two months’ time.
“We have agreed with the constructors to begin the work in 60 days. The constructors told us they want 60 days to bring in construction equipment and manpower,” he said.
The new stadium will be constructed on 50,000 square metres of land given to the club free of charge by the Addis Ababa City Administration five years ago. The cornerstone was laid on April 24, 2005 by the club’s patron, Sheikh Hussein Mohammed Al-Amoudi, who promised to cover 80 percent of the construction cost.
“The St. George fans and the public at large will cover the remaining 20 percent. We are hopeful that the people will do it,” Ato Abenet remarked. Twenty percent of the cost is 50 million birr. The stadium will have a 22,500 capacity along with a VIP lounge, press booth, meeting rooms and shops.
“The construction work is expected to take 24 months. This is what is agreed in our contract,” Ato Abenet said.
Mr. Jhou Feng, the Chief Country Representative of CJIC said that his construction firm has been working in Ethiopia for the last 15 years. Asked whether the firm has experience of constructing stadiums, Mr. Zhou Feng said it built one in Djibouti.
“Our firm is now constructing a hospital at Akaki. We have been working in Africa, including Kenya, Zambia and Botswana, for the last 20 years. It is our great pleasure to construct this stadium for St. George,” Mr. Zhou Feng added.
Ethiopian Trade and Industry Minister Girma Biru has declared the last four years’ export performance a success with an average annual increase of 20 percent.
By Kirubel Tadesse
A five year trade- and economics-related performance report was put together by the Ministry of Trade and Industry (MoTI) for parliament this week. Girma Biru was scheduled to present the report last Thursday, but the majority of the house’s MPs did not show up for the meeting for unknown reasons.
The brief 25 page report of MoTI, which was supposed to be presented during the meeting, explains that in 2005/06 the export sector revenues shot up by over 20 percent.
“To ensure fast development we need to boost foreign currency earnings through exports and there was a target of a boost between 20-25 percent annually for the five years,” Girma’s report reads.
Meeting the target, the last four year performance now stands with an average percentage increase of 20.16 percent. The 2005/06 annual earnings of 919 million dollars reached 1.45 billion dollars last year enjoying an increment of 77 percent.
The first eight months of the current budget year saw 1088.7 million dollars revenues from export, a 22.5 percent boost from the last year. However, last year the performance was a poor one.
Capital reported the discontinuation of a positive trend of at least growing by double digit GDP percentage growths; last year’s export revenues, which had targeted 2.5 billion dollars, were even below the 1.5 billion dollars of the previous year.
The latest report says the global economic slowdown and market demand shrinkage starting from 2008/09 is to blame.
With imports mounting, the export underperformance led to an exacerbation of the hard currency crisis and most industries were not able to import various raw materials.
Though the latest report mainly blames the global economic outlook, Prime Minister Meles Zenawi holds some coffee traders responsible for the poor performance.
According to the government, breaching agreed exports contracts, some coffee exporters were hoarding coffee destined for foreign markets, some anticipating higher prices in later months, while others were said to be trying to starve the then newly-established Ethiopian Commodity Exchange.
Senior government officials and later Meles himself cautioned six major coffee exporters to stop the act. Meles gave them a clear timetable after telling them that law enforcing agencies were aware of their sabotage, even to the extent of knowing where the coffee was stashed.
The exporters failed to comply, according to the government, who later seized the coffee and sold it through the state-run Grain Trading Enterprise.
All the bank loans in connection to the seized coffee were paid from the sales revenues, but the amount to be paid to the coffee exporters is yet to be decided on.
The data of the first quarter export performance this year was also worrying as the figure of 342.8 million dollars was well under the 495.6 million dollars expected, according to data released by the Export Trade Promotion Agency.
Coffee exports, which always earn the lion’s share of revenues from the sector, were the reason: they earned only 104.7 million dollars, falling short of the target of 146.1 million dollars.
“There are strengthening factors that will boost the exports this year particularly, though it is true, the first quarter performance fell short of the target,” Meles commented to Capital when asked if his government will revise its target this year.
“The first factor is that our coffee production is much higher. But the problem was the money allotted by banks to mobilise the coffee was not adequate to meet the growth and, as a result, coffee has been slow to take off. Sesame production as well has grown, but it also has been slow to mobilise. The problem will be resolved during the coming months. Therefore we don’t plan to revise the target and we believe we will meet the original target,” Meles said, affirming the government’s position.
Now, as projected, the eight months of the budget year saw a 22.5 percent boost from last year’s poor record to take revenues to just above a billion dollars.
Overall, in the last five years, while the nation’s biggest economic sector, agriculture exports, was the major contributor to the revenue increase, improving its share by 22.6 percent, mine-related exports such as gold also grew by an over 15 percent average.
Addis Ababa, Ethiopia – The Ethiopian government and the separatist rebels, the Western Somali Liberation Front (WSLF), have reached a peace agreement, government spokesman disclosed here Friday.
‘Preliminary discussion with WSLF has borne fruits this week. The leaders of this group have agreed to abide by Ethiopia’s constitution and they are expected to announce from here (his office) how they are planning to operate in Ethiopia,’ Bereket Simon, Minister of Government Communication Affairs, told a news conference.
According to Bereket, the entire WSLF ” the earliest rebel group in the vast, ethnic-Somali region of eastern Ethiopia that fought nearly for four decades for independence, and weakened lately ” will be one of the legal opposition politic al parties allowed to advance its agenda freely, peacefully and publicly.
‘It is not a splinter group. Basically, the entire force has come to the constitutional folds,’ the minister said.
WSLF was founded in early 1970s by Hargeisa-raised and Syria-trained young captain, Yusuf Dheere Mohamed Sugaal.
After meeting Yusuf Dheer in 1973, then Somali president, Mohammad Siad Barre, helped the captain muster 35,000 regulars and 15,000 fighters in four years and in filtrated them into Ethiopia’s vast desert Ogaden region in Mayâ”June 1977 ahe ad of overt warfare in July.
By September 1977, Mogadishu controlled 90 per cent of the Ogaden and had followed retreating Ethiopian forces into non-Somali regions deep in Ethiopia. When Ethiopia’s army revived and fought back with Soviet and Cuban support in the Ogade n War of 1977-78, WSLF played a major role assisting the invading Somali army before the aggressor was defeated.
The Somali government subsequently forbade the WSLF and its leaders to use its territory to launch attacks into Ethiopia. Siad Barre’s decision to restrict the WSLF led to Yusuf Dheere’s in 1989 and the formation of WSLF splinter, the Ogade n National Liberation Front (ONLF), which still actively fights Ethiopian army.
Though responsible for numerous atrocities carried over the more than 30 years, Ethiopia’s government seems ready to forget that.
‘We will not do accounting of the past. We will respect their right to operate in a civilized opposition model,’ Bereket said.
Source African News
A Briton working for an oil company has been shot dead in Ethiopia, the Foreign Office has confirmed.
The 39-year-old geologist was killed on Monday near Danot, a town in the Warder zone of Ethiopia, in the conflict-stricken Ogaden region.
He worked for IMC Geophysics International – which was subcontracted to Malaysian oil giant Petronas.
It is believed he was attacked while driving alone in what officials have called an “act of banditry”.
A Foreign Office spokeswoman said: “We can confirm the death of a British national on 5 April near Danot town in the Warder zone of Ethiopia.
“Next of kin have been informed and we have offered the family full consular assistance.
“The Ethiopian authorities are carrying out a full inquiry and we are liaising closely with them.”
Bereket Simon, Ethiopia’s communications minister, said the man had not taken the appropriate “security measures” and was driving alone.
He said: “We have reports that the incident has occurred and is an act of banditry.
“Following the act the local militia had confronted the perpetrators and had taken measures on them.
“We understand that the act was not politically motivated.”
Although Ethiopia does not currently produce oil, Chinese companies and Petronas have signed deals to explore the area.
The area has seen a great deal of bloodshed as the Ogaden National Liberation Front (ONLF), formed in 1984, has fought for the independence of ethnic Somalis in the oil-rich region for some time.
It says the Somali-speaking population has been marginalised by the capital Addis Ababa.
The fighting has escalated over the past two years following an ONLF attack on a Chinese-run oil exploration field.
More than 70 people died in the attack, including Ethiopian guards and Chinese workers.
Addis Ababa calls the rebels “terrorists” and has cut off all access to the region.
But Abdirahman Mahdi, spokesman for the Ogadeni rebels, told the Associated Press news agency that as far as they were aware, “our fighters are not involved in such barbaric attacks”.
“Our troops do not have permission to target foreign civilians. But we will investigate the circumstances that led to the man’s death.”
By Xan Rice
|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