Ethiopia, in Northeastern Africa, has an area of about 1 133 380 km2 and an estimated 1996 population of about 56 million. The capital city is Addis Ababa, other major towns are Dire Dawa and Harar. The official language is Amharic, however, English, Arabic and Italian are used in business. The local currency is the Ethiopian birr. The international time zone is GMT +3 and the international dialing code is +251.

Ethiopia remains one of the least developed nations in the world. Its economy is dominated by agriculture, which accounts for almost half of the country’s total GDP, 90 percent of exports and 80 percent of employment. Frequent droughts and poor cultivation practices plague the agricultural sector. The small manufacturing sector within the country is highly dependent on government subsidies. Recent government policies have focused on policies of liberalizing the economy and privatizing many state-run operations.

The oil and mining industries are significant sectors with potential for the country’s economy. The Ethiopian Electric Light and Power Authority (EELPA), a publically owned utility, administers electricity in Ethiopia through the Interconnected System (ICS), fed by various hydro and thermal plants.

Water resources

Rainfall varies from an average of 2400 mm/year in the southwest to less than 150 mm/year in the north. There are substantial water resources, including lakes, rivers and groundwater; but detailed up-to-date hydrometric data are not available. This has been a major obstacle to assessing the country's hydro resources in detail. The Ministry of Water Resources manages water resources.

Energy and power sectors

Estimates of Ethiopian electrical consumption in 1996 equaled approximately 1320 GWh, of this approximately 87.12 percent was generated by hydropower. The country’s total electrical installed capacity of 486 MW, of which 378 MW is at hydropower projects. Most traditional energy sources are used for cooking and lighting, and thus energy consumption is dominated by the domestic sector, which represents 89 per cent of energy consumed, mostly rural homes. There is considerable disparity between regions, with some having electricity supplies, and others, particularly in rural areas, having no power. This has accelerated rural to urban migration.

The Ethiopian Electric Light and Power Authority, known as the EELPA, is responsible for electricity generation and supply in Ethiopia. The EELPA operates an interconnected transmission grid centring on Addis Ababa. A subsidiary of the EELPA, the Eritrea Region Electric Supply Association, operates isolated generating facilities. Ethiopia has significant oil and gas reserves and has not yet exhausted its economic hydropower potential.

Power projects undertaken over the last eight years have seen 146 towns become electrified. The number of electricty customers has grown from 400 000 in 1991 to 550 000.

The on-going and increasing use of traditional fuels is having serious effects on the environment, through emissions and soil erosion. The development of small hydro in rural areas is a promising solution, but so far progress has been minimal. To improve the energy situation in the country, the first national energy policy has been developed recently, and this gives priority to the gradual replacement of traditional fuels with non-fossil energy sources. It indicates that in the long term the country will depend heavily on hydropower, which is the largest energy resource. The policy allows for private participation in the hydropower sector, although such participation needs to be more clearly defined.

Hydropower development

Ethiopia has long recognized its hydropower potential but due to financial shortfalls the realization of this potential has been largely untapped. The country’s gross theoretical hydro potential has been calculated as 650 000 GWh/year, and the technically feasible potential is estimated at more than 250 000 GWh/year (these figures include Eritrea). 60 percent of the water in the Nile River is supplied by the Blue Nile, which originates in the highlands of Ethiopia. A study in 1982 estimated the economically feasible hydro potential to be between 15 and 30 GW. Development of the major rivers is still at the planning stage.

Despite the vast opportunities for hydropower development the country suffers from serious shortages of electricity due to slow development of hydro. Several large plants are required, but there are severe financial limitations.

Over 180 MW of new hydro capacity wasunder construction at the end of 1996, and more than 2000 MW identified at potential projects. Construction is now beginning on several new projects, such as the 80 MW Tis Abay II hydro project, being built by EELPA to relieve power shortages in Addis Ababa. EELPA is planning to build the 192 MW Gigel Gibe hydro project soon, about 250 km southwest of Addis Ababa. Selection of a contractor was under way at the start of 1998. This project began several years ago, with support from North Korea, but little work was completed. Another planned scheme, Chemoga Yeda, could be developed in two stages. It would include the Halele Werabea scheme, with two dams on the Omo river (providing 85 MW at the upstream site and 350 MW at the lower project); and, the Beles project near Lake Tana (270 MW). Finance largely by the government, with assistance from the World Bank, these hydropower projects will significantly increase the the country’s present generating capacity. The total cost of the projects is not known.

There are several projects currently underway in Ethiopia. Hydroelectric plants capable of generating 34 MW are to be established on the Fincha River in western Ethiopia. The Koka, Awash-2 and Tis Abay plants are to be upgraded.

A 230 kV power distribution station is to be constructed. This will supply power services from Bahir Dar to Alamata, and then to Mekele. A 132 kV distribution centre, which supplies the 200 km route from Gedo to Nekemte to Gimbi has been constructed. Two new hydroelectric power stations are being built in the Abay River Basin on the Nile. The construction is being carried out by Chinese and Yugoslav firms.

Ethiopia is in the process of building a hydroelectric power station on Gilgel-Gibe, using a $200 million loan from the World Bank.

Small hydro

There are a few small, mini and micro hydro plants in operation, and numerous potential sites. About 10 per cent of the economically feasible potential is thought to be suitable for small scale developments. EELPA has about ten small hydro plants in operation, with a total capacity of about 18 MW, and aims to construct about 25 small hydro projects between 1990 and 2000.

Small hydro could provide considerable help to the country, by meeting the power deficit in the main interconnected grid system, substituting thermal plants in the main grid or isolated grids, helping reduce fuel imports and electrifying remote rural areas.

Future outlook

Domestic power demand is expected to increase to 13 500 GWh/year by 2020. To meet this demand, and possibly to provide surplus power for export, the large hydro potential of the Nile Basin could be exploited. A preliminary assessment has identified 184 potential sites (103 600 GWh/year), of which 18 projects (43 970 GWh/year) have been tentatively proposed, with a construction schedule up to 2020. Of these, six multipurpose projects, with a combined output of 21 000 GWh/year, could provide Ethiopia's domestic power needs up to 2035, as well as providing for irrigation for an area of up to 1 00 000 km2.

The further development of small hydro plants is crucial to meet the needs of the scattered rural population. A detailed and comprehensive study of the nation’s river basins and the development of an international agreement defiining the country’s claim on transboundary rivers are important issues that need to be addressed.