Ethiopia – No more power problem?

September 1st, 2009 | by addis portal |

By Yohanes Anberbir and Elias Meseret One thing that all people would agree with is that the severe electricity shortage that has hit the country in recent times has become a constant source of public and government concern. The public has begun to question the competency of the relevant authorities that have failed to deliver one of the basic utilities.
As a breakdown that needs to be tackled, and which is devastating the economy, the state-owned Ethiopian Electric and Power Corporation (EEPCo) has been relentlessly engaged in increasing its hydroelectric production capacity.
When the power shedding persisted, officials at the corporation attributed it to the lack of rain and subsequent below capacity production. In addition, the ever increasing high power consuming industries, wide investments and the delay in completion of hydropower projects have contributed greatly to the power shortage the nation has been facing.
Because of this power shortage, Ethiopia is now forced to spend close to 100 million birr per month in fuel costs for generators to supplement power monthly.
Blackouts disheartening effects on businesses
This year’s blackouts, rated as the worst ever by various experts and the public at large, left a big black mark on the business community.
Salahadin Khalifa, General Manager of Kadisco Chemical Industry, says that his company is now hardly operating and 70 per cent of its activities are reduced.
“We have been working with generators for the past two months but the cost is very high, in some cases reaching 4,000 birr a day,” he told Capital. “As a result, we have stopped the generators and are waiting till things improve.”
Asked how the power cut’s impact compares to the foreign exchange shortage that is also plaguing the nation, he said lack of foreign exchange had caused his business to scale down and finally halt operations in the past, but it has its own ways out even though that had also created a big turbulence in the economy.
“Our company’s power consumption is very small but the company’s products need a light-assisted production processes. So, we have found even the new schedule problematic,” the General Manager explains, noting that his company has received a letter from EEPCo stating that they could use power every day from 11pm to 7am when the power load is eased from ordinary users.
Kadisco’s reduced production has resulted in the absence of the company’s products from the market. Be that as it may, Salahadin says Kadisco will capitalize on the large local market and will try to re-employ the 32 workers it discharged during the continued blackout period.
Asimako Paulos, Deputy Manager of Addey Ababa Textile said that they could not run their company properly due to the current power crisis.
“The power crisis has hit our company since mid May and we have halted production entirely for 72 days since then.” The deputy manager continues, “It is simple logic to realise the extent of the impact. We are not producing and we don’t have products to sell. What’s worse, we cannot afford to pay our employees.”
Asimako added that they let go most of their temporary workers, which also led to the resignation of some of the permanent employees. He stated that “Compensation to the employees who resigned also costs our company a significant amount of money. I know that the power crisis is a national problem but there should be some mechanism to support us, so that industries like ours can cope with the situation.”
To procure a generator with enough capacity means a cost of up to 3 million birr,” continues the deputy. “We requested EPPCo’s cooperation in postponing a one month bill in order to pay our employees. They refused, and even told us that they would disconnect our power supply unless we paid immediately. All companies are currently cooperating with EEPCo when it fails to supply electricity, but when we request some type of cooperation, they ignore us. It is an offensive approach and very disappointing,” Asimako said, disheartened.
He expresses great frustration, claiming help has only been forthcoming from one source. “EEPCo is not the only institution; go to the ministry of trade and industry, chambers or anywhere and you will find no cooperation. Even the media itself is not interested to make our situation known. However, we owe thanks to the Commercial Bank of Ethiopia who recognized the situation and rescheduled our loan installment period for three months.”
Asrat Abebe, Secretary General of the National Association of Ethiopian Manufacturing Industries (NAEI), told Capital that the power-cut’s impacts have forced many companies to discharge temporary workers and give enforced annual leave for permanent workers.
“All sectors, especially the export oriented ones, are severely affected. Even if some of them opt to use a generator to compensate the power cuts, the rising fuel price aggravates the situation,” he remarked.
For now, both the public and businesses can only wait to see what the next dry season will bring.
EEPCo’s officials have previously revealed that by 2010, the construction of the Tekeze Hydro Power Dam with a capacity of 300MW, Gilgel Gibe II with a capacity of 420MW and Beles Hydro Power Dam with a capacity of 435MW will be completed, with neighboring Djibouti, Kenya and Sudan being the most likely markets. It estimated it could earn tens of millions of dollars a year from exports.
One of the recent indicators of positive times ahead for EEPCo is that Tekezze has started a trial power-generation, and it is assumed it will enter the national grid in a few months. Gilgel Gibe is also expected to start trial power generation by mid-September. Officials of the power utility said that the level of water that is pouring into the dams can be considered to be enough, and the power shedding is now easing.

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