Major power, highway projects valued at USD 6.5 bln approved for PPP
The newly instituted Board of the Private and Public Partnership (PPP) has approved 17 major hydropower and highway projects, costing USD 6.5 billion for private sector involvement under the newly drafted PPP framework, The Reporter has learnt.
Teshome Tafesse (PhD), director general of the Office of Public Private Partnership (PPP) with the Ministry of Finance and Economic Cooperation (MoFEC), has briefed both The Reporter and Ethiopian News Agency (ENA) on Thursday that a total of 3000 megawatt generating hydro and solar power projects will be developed in partnership with foreign private companies at an estimated cost of USD 5.3 billion.
Following the approval of the Board, five major hydro power and eight solar power projects have been potentially identified as megaprojects. Genale Dawa 6, Genale Dawa 5, Chemoga-Yeda I&II, Halele Warabessa, Dabus hydro power projects with the generating capacity of 2071 megawatt of electricity at a cost of USD 4.093 billion are already underway, mostly to be developed and owned independently by private firms over a period of 20 to 25 years of concessions.
It is to be recalled that a UK based Globeleqe in partnership with Contingent Technologies, has expressed interests for the construction of Genale Dawa VI hydropower project. Representatives of the two companies had met with Ethiopian officials and explained they have secured USD 850 million for the project and once agreed would be the first to be considered as independently owned private hydropower investment in Ethiopia.
The project ideally incorporates a potential irrigation scheme as well. Some 20,000 to 27,000 hectares of farmland could be irrigated along with the generation of hydroelectric power.
In addition to hydropower plants, solar energy projects such as Gad scaling and Dicheto phase one are both projects to be undertaken in the Somali and Afar Regional States and are expected to be developed via the Independent Power Purchase (IPP) agreement schemes under the PPP framework.
Apparently, the PPP framework does not insist on the strict partnership of the public and private sector in the so called mega public projects; in fact it is an arrangement where private sector developers could get involve in the public projects but not necessarily in partnership with the government. The IPP, for instance, is an arrangement where private contractors could get concessions to develop power infrastructure and feed the power they generate back to the national grid at an agreed up on rate.
When the likes of Mekelle, Humera, Welenchetti, Weranso, Metema, Hurso Solar PV projects are added up into the grid, a total of 1,000 megawatt solar power with an estimated value of USD one billion is expected to be developed in the foreseeable future. Moreover, power transmission lines and substations that constitute 18 project lots are also under negotiation with the Chinese company called China State Grid. Hence, according to Teshome, the fate of these projects is decided to remain under the management of the PPP directorate for a while.
Basically, the project implementation and monitoring tasks are left to the responsibilities of “Contracting Authorities” as they are referred to in the PPP proclamation. Hence, for instance, the Ministry of Water, Irrigation and Electricity is the contracting authority for the power generation and transmission projects private companies are negotiation to develop.
In addition to that, three major expressway road projects that could link the Somali Regional State with Oromia Regional State have also been approved for future development under the new PPP framework. According to Teshome, a total of 357 kilometer road network stretching across Adama-Awash for 125km, Awash-Miesso for 72km and from Miesso to Dire Dawa for a distance of 160km are expected to be some of the projects to be develop under the PPP framework.
The totality of the road project will cost USD 1.125 billion, which is to be shared between the government and interested companies in the spirit of private-public partnership.
Back in 2017, the government has instituted a PPP board chaired by MoFEC and comprising seven other ministries and two representatives of the private sector designated by the Ethiopian Chamber of Commerce and Sectoral Association (ECCSA).
Prior to the formation of the Board along with the directorate general office, which handles the day-to-day operation, policy document, a governing proclamation and a directive have been issued to mandate the PPP framework to deal with mega projects.