Ethiopia: substantial advance for the Grand Ethiopian Renaissance Dam

The Ethiopian Electric Power company signed on January 10 a $78 million agreement with Voith Hydro Shanghai for the installation and commissioning of six generators for the country’s Grand Ethiopian Renaissance Dam (GERD). The agreement represents a substantial advance in the development of the proposed 6,000 megawatt facility, whose electromechanical construction was largely stopped in 2018 by the Ethiopian government over domestic financial mismanagement and grossly insufficient technical expertise.

While much of the dam’s concrete structural works have been completed by the Italian contractor Salini Impregilo, the Ethiopian government-owned Metals and Engineering Corporation (METEC) held the far more complex electromechanical and hydraulic steel structure works contract to procure, install and test the sixteen turbines intended to generate the intended 6,000 megawatts of electricity. Simply put, the military-run Ethiopian parastatal lacked the technical expertise to perform the highly specialized installation, testing and performance work. Two turbines that were installed by METEC were unsuccessful upon their testing, and the parastatal struggled to find a solution. 

Upset with construction delays to the national priority project and learning of extensive financial mismanagement, Ethiopian Prime Minister Abiy Ahmed in late August cancelled   METEC from its GERD contract. New Ethiopian project management with engineering expertise were appointed in early October to oversee GERD works. METEC itself was restructured in mid-October, new leadership appointed, and its civil and commercial works divisions were removed and placed under a newly-created National Metal Engineering Corporation, while its military industrial manufacturing division was transferred to ministry of defense oversight (whose minister, the civilian and reformist Mrs. Aicha Mohammed, was also a new appointment). Lastly, senior officials from METEC, notably its former director general retired General Kinfe Dagnew, were arrested (Dagnew himself was detained fleeing to the border town of Humera) on charges of corruption relating to allegations of fraudulent spending of more than $2 billion. Government prosecutors have charged Dagnew with four counts of corruption.

The acquisition and installation contract now held with the technically-capable Voith Hydro Shanghai means that the government’s rescheduled timetable for the completion by 2022 (revised from 2017) of the hydroelectric power project can proceed. The electromechanical works are likely to take a few years, while the remaining civil works perhaps two to complete. Only once all the performance tests are complete can the dam start to be filled, which could take another two to three years to perform. So there are still several years – perhaps no earlier than 2025 – before the full capacity of the GERD will be realized, conforming to public statements Abiy has made as to the dam’s completion. 

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