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BMI View: Ethiopia's state-driven investment model raises the likelihood of successful project delivery -
particularly hydropower megaprojects that will dominate our forecast to 2025. At this stage, our forecasts
are conservative based on the huge scale of the country's hydropower expansion plans and concerns that
disputes over water rights could lead to delay, but we do expect to upgrade the forecast as projects move
into the construction phase owing to robust government support.
Key Trends And Latest Developments
? Hydropower will remain the dominant source of electricity generation in Ethiopia over our 10-year
forecast period as the country pursues ambitious plans to build a series of hydropower megaprojects. Our
forecasts are conservative and currently belie Ethiopia's government targets and true hydropower
potential on the basis that many hydropower projects are still in the planning phase. Nevertheless, with
such strong government support for new hydropower, we will consider revising our forecasts upwards as
projects move into the construction phase.
? Ethiopia's plan to use its vast hydropower resources to lift low domestic electrification rates and establish
itself as an East African electricity export hub will drive its ambitious hydropower expansion plans. The
Grand Ethiopian Renaissance Dam (GERD) is the country's flagship project and we have included the
6GW project in our forecasts.
? In line with our views, state-owned Ethiopian Electric Power (EEP) is also slated to build two
hydroelectric dams on the Genale-Dawa and Dabus rivers, according to reports from July 2016. The
schemes will have a combined generation capacity of 672MW, of which the new Genale-Dawa dam will
account for 248MW, while the Dabus River dam will have capacity of 424MW. Similarly, in June 2016
EEP awarded the EUR2.5bn (USD2.83bn) Koysha Hydroelectric Dam project to Italian industrial
group Salini Impregilo.
? Beyond the hydropower sector, Ethiopia is emerging as a burgeoning renewables market in Sub-Saharan
Africa. On June 27 2016, China's Dongfang Electric Corporation signed a contract with stateowned
EEP to construct a 120MW wind park in the Ayesha area of the Somali region of Ethiopia. It is
also expected that the signing of Ethiopia's first independent PPA in 2015 - for the Corbetti geothermal
project - should set a precedent for other private investors.