The Ethiopia economy has become one of the emerging economies in the world. It has been registered a double digit economy almost for the past consecutive ten years.
The growing economy needs the development of power that could shoulder the country’s economy so that the government of Ethiopia has been investing on developing power at large.
Available sources indicate that the Ethiopian electricity coverage has reached 54 percent in 2016 from 41 percent in 2009. But this has to go inline with the fast and sustainable economic growth of the country.
In this regard, it is mandatory to raise the electricity generating capacity of the country with a maximum of 25 percent every year.
The government also planned to increase power generating capacity to 15,000 Mega Watts so as to raise the electricity coverage of the country to 99 percent in 2020.
It is a public secret that some of the projects are financed by the people and government of Ethiopia; whereas, other are built in some extent through financial support of international organization or independent countries who have been collaborating with Ethiopia as its development partners.
The agreement made by the Ethiopian Electric Power and Standard Bank South Africa is one of the typical examples held recently. The two parts have signed loan agreement estimated at more than 100 million US dollars. The agreement mainly aimed at financing the upgrading and rehabilitation of electric power sub-stations located in various places of Addis Ababa.
The limited substations and the long time served transformers as well as electricity transmission lines lead to irregularities in providing appropriate services to costumers that is one of the crucial problems connected with dissatisfaction of the public.
The problem is quite clear. There are electric interruptions and blackouts not only in Addis Ababa but also the rest of the country that have aggravated the dissatisfaction of the people in connection to lack of good governance.
This issue was raised and discussed repeatedly but hasn’t got any solution yet. The major reason for this failure is the fact that there is less number of sub-stations than what is actually needed.
Besides, the transformers in some of the places are too old to provide their function properly. In the same token, the wires have also become old and a lot of investment is needed to change all these along with generating enough amount of electricity.
W/ro Rahwa is in her sixties. She is one of the residents of Addis Ababa. She said, “There are blackouts in holidays and weekends. We asked the responsible persons in Ethiopia Electric Power to solve the problem because we thought it was connected with lack of good governance. But they have been arguing that the problem is partly happening due to the failure of transformers and transmission lines, These two in some areas gave services for many years and got on one hand old and on the other hand there not as many substations. They said that these problems could be solved if and only if these old transmission lines and transformers have changed”.
In fact, rehabilitation is so crucial that what was constructed some thirty years ago may not fit for current situation for many reasons.
Firstly, the number of people demanding electricity for light and other uses has already increased. According to some sources, the total population in Ethiopia some twenty-five years ago was about 55 million but that number has doubled and currently the population reaches 103 million. The growing population has obviously a grown demand on electricity. The people who were using electricity previously may also diversify their need to use power.
In some places of the capital City the electricity lines and transformers served for some years and they mightn’t have enough capacity for the growing need of the population for power.
The rehabilitation of transformers and electric transmission lines could improve the electric delivery to the residents of Addis Ababa in particular and the entire population in general. Therefore, the agreement made will benefit the residents of Addis Ababa as it could improve the interruptions blackouts of electricity caused in connection to the aforementioned reason.
Secondly, as part and parcel of the government effort to boost investment in the country, there is a number of private investments in the capital City. These industries and factories demand a large amount of power. The rehabilitation program could also satisfy the need for power of investors in the city.
According to Africa business communities, the money secured by the loan agreement will finance 85 percent of the planned rehabilitation project in Addis Ababa and the rehabilitation cost of the rest 20 percent will be provide by the Ethiopian government. It is emphasized that the rehabilitation project involves the upgrading of the aging 132 kv and 230kv power transmission lines of the city.
The various hydropower projects including the Grand Ethiopian Renaissance and the Gilge Gibe Dams are expected not only to satisfy the electric demand of the Ethiopian people but also to satisfy the regional power demands.
The agreement made between EEP and the Standard Bank of South Africa is also believed to include the development of two new substations, extension of three existing substations and building three new transmission lines within the capital city.
The Ethiopian Electric power Corporation has been attempting to scale up its power generating capacity and to improve the service delivery. Nowadays, available documents from the Ethiopian Electric Power that the average per capita electricity consumption of the city has reached 105 kWh per year.
It also known that EEP signed 104 million USD loan agreement with the African Development Bank some three months ago mainly aimed to finance the Meqelle-Dallol and Semera-Afdera Power Transmission Lines.
African Business communities also reported that the country secured a record amount of loan 1.8 billion dollars in total from the World Bank in the past fiscal year.
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 55 percent of the GDP.