Chinese firms introducing new forms of energy into Ethiopia

Building on support from foreign aid projects, the companies are remaking the economic and infrastructure landscape in the African nation, reports Yao Jing

After a journey of 80 kilometers on the smooth Addis Ababa-Adama Toll Motorway, 34 white wind turbine towers came into view.

Arrayed along the Great Rift Valley, they were spinning in the wind. It was early December, the dry season in Ethiopia, and the undulating grasslands had turned yellow. In the far distance lay Addis Ababa.

The capital is just one part of Ethiopia where Chinese construction companies are changing the economic and infrastructure landscape of the African country.

The turbines, installed by HydroChina International Engineering Co Ltd, have supplied 200 million kilowatt-hours of electricity to households in Ethiopia in the past 20 months.

Not far away, the second phase of the Adama Wind Farm Project, which will have 102 wind turbine towers, has been launched.

"We expect to triple the installed capacity to 153 megawatts when (the second phase) opens in March," said Wang Yantao, deputy general manager of HydroChina International, a subsidiary of State-owned HydroChina Corp.

HydroChina is representative of the Chinese infrastructure enterprises that are building roads, bridges and housing in Ethiopia, catering to the country's construction boom.

They didn't stride into the promising but remote market alone; instead, they tapped into Ethiopia through Chinese government foreign aid projects.

"We launched the China-Aid Wind Power & Solar Energy Master Plan in 2011. The project took 17 months, and we designated 12 workers to operate the project," said Wang, who moved to Ethiopia at the beginning of the aid project.

As China's first technology-based foreign aid project in Ethiopia that involves renewable energy, Wang said the wind farm has become a catalyst for extracting the country's potential wind and solar power.

Wang's company has also gained much knowledge in the operation of the project.

The Adama One Wind Farm is the first wind power plant in East Africa. It has already been connected to the country's main power grid.

The project cost $117 million, with 85 percent covered by loans from the Export-Import Bank of China. The Ethiopian government provided the balance.

"All parts and machinery were imported from China. For the ongoing operations, we're employing 20 local workers and four Chinese staff," said Wang.

Challenges

He said his biggest challenge is developing a group of local employees, since many workers in Ethiopia are "complete strangers" to technology.

The second phase of the project has attracted investment of $245 million.

"It will take at least 20 years for us to recoup the investment," Wang said.

Ethiopia urgently needs infrastructure. It's banking on huge government-supported energy and transportation projects to help transform its agrarian economy.

Infrastructure projects required financing equivalent to 19 percent of Ethiopia's GDP in fiscal 2011-12 (the fiscal year starts on July 8), according to World Bank estimates.

"China's economic development model is a benchmark for Ethiopia. We hope to get more support from China, both in finance and technology," said Ahmed Shide, Ethiopian minister of finance and economic development.

Shide said that Chinese infrastructure projects have made "visible and significant" contributions to Ethiopia's road and rail facilities.