December 31, 2012 (ADDIS ABABA) – Ethiopia and Sudan are in negotiations to balance the revenues earned from Ethiopia’s sale of electric power to Sudan with the equivalent expenditure of oil imported from Sudan to Ethiopia, according to the Ministry of Foreign Affairs in Addis Ababa.

Blue Nile Map

After the completion of the Ethiopia-Sudan transmission line in February Ethiopia has, in a test run, started exporting 100 megawatts (MW) of hydro-power generated electricity to Sudan. Sudan will initially be provided with 100MW but this is expected to increase over time.

Ethiopia imports most of its fuel from Sudan, spending over 50 percent of the 4.4 USD made from the country’s total 2012 export earnings to meet nation’s fuel demand. Ethiopia sells electricity at a price of 0.6 Ethiopian Birr per Kilo Watt. This is equivalent to 0.07USD for Kwh.

Sudan was already a large importer of Ethiopian agricultural products before the electricity deal. Ethiopia also supplies 80 percent of Djibouti’s electric power.

Ambassador Dina Mufti, the spokesperson of the Ministry of Foreign Affairs, said the power deals Ethiopia is making with neighbouring countries “will also have an important role in supporting the African Union’s efforts towards continental integration”.

The Ethiopian official did not detail where the talks were taking place but he said the state utility, Ethiopia Electric and Power Corporation (EEPCo) is handling it and is already working with Sudanese officials.

The Horn of Africa nation is spending billions of US dollars constructing power plants including the dams on the Blue Nile, which have proved controversial with Egypt and to a lesser extent Sudan.

As part of the country’s five year Growth and Transformation Plan, Addis Ababa is aiming to boost its power production capacity from 3,000 MW - its current level - to 10,000 MW by 2015.

Ethiopia is considered among continent’s leading natural energy producer and has an estimated potential of producing 45,000 MW of hydroelectricity, according to data based on studies provide by the EEPCo.

Ethiopia has a total of 12 hydro-power plants, including those under construction. The most controversial project is the Renaissance dam which is being built in Blue Nile River.

There are also other massive Dam projects such as Gilgel Gibe III along the Omo River. The dams on the Blue Nile River and Omo River dam projects will both have trans-boundary impacts.

Environmentalists have been protesting against the Gibe projects, arguing it will affect the hundreds of thousands of nomads whose livelihoods depend on the water source.

In case of dam projects along Blue Nile River, down stream countries of Egypt and Sudan say the projects will reduce water flow to their territory and further say it violates a historic water rights treaty signed in 1959.

Ethiopia is leading other upstream countries to demand a fair and equitable share of the Nile Basin’s water sources.

Despite growing protests Addis Ababa, however, insists to carry on the projects with or without external funds.

(ST)