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CORRECTED - China, Ethiopia sign 1.9 bln euro hydro power deal

Published 07/15/2009, 09:16 AM
Updated 07/15/2009, 09:24 AM
TTEF
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(Corrects figure to euros from dollars)

* Concessionary loans, buyers' credit to finance project

* Seven dams under construction

ADDIS ABABA, July 15 (Reuters) - Ethiopia has signed a 1.9 billion euro ($2.67 billion) deal with China to construct two hydroelectric dams with a capacity of more than 2,000 megawatts, its national electricity company said on Wednesday.

The agreement between Sino Hydro Corporation Limited and the Ethiopian Electric Power Authority (EEPA) brings the number of hydropower dams under construction in Ethiopia to seven with an aggregate total capacity of over 5,000 MW.

Eighty five percent of the project will be financed through preferential buyers' credit and concessionary loans from China with the balance covered by Ethiopia, said Mihret Debebe, EEPA's general manager.

Mihret said the pact that was signed on Tuesday was for the construction of Gibe IV and Halele Werabesa dams, expected to produce 2,150 MW when completed in five years.

Gibe IV is a continuation of three other hydro dams on the 325-mile (523 km) Omo river. Officials estimate that the hydropower potential of the nation -- blessed with cascading rivers flowing through rugged mountains -- is around 45,000 MW.

Ethiopia plans to export excess electric power to Sudan, Djibouti and Kenya, officials said. (Reporting by Tsegaye Tadesse; Writing by Jack Kimball; Editing by Anthony Barker)

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